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Tim & Jennifer Bishop – Retirement and Inheritance

Tim and Jennifer, both 60, are at an exciting yet critical stage of life. With $1.5 million in traditional retirement accounts and $1 million in taxable brokerage assets, they’ve done an excellent job of saving for the future. However, like many retirees, they’re concerned about whether their nest egg will last. They dream of traveling and living in different cities over the next 10 to 15 years, taking advantage of their good health and newfound freedom. Adding complexity to their planning, Jennifer anticipates a significant inheritance but isn’t sure when—or even if—it will materialize.

The Numbers

2500000

Investable Assets

175000

Annual Living Expenses

10

Big Travel Years Before Settling Down
Scenario Analysis

What did we look at?

1

Retirement Timing

Tim and Jennifer want to retire as soon as possible without sacrificing their goals and lifestyle. Weighing the incremental cost of early retirement will ensure they can make an informed choice.
2

Inheritance

Jennifer expects a significant inheritance in the next 10 years but isn't sure how, or if, to account for that in retirement planning.
3

Lifestyle Goals

Identifying and prioritizing Tim and Lisa's goals will be key to aligning them with their resources for a successful retirement.
4

Roth Conversions

Tim and Jennifer have substantial opportunities for Roth Conversions after retirement in years where they have low income and are in lower tax jurisdictions.
5

Tax Jurisdiction

Tim and Jennifer's plan to move across the U.S. presents tax opportunities to realize income in years where they reside in low or zero income tax states.
6

Legacy Goals

Tim and Jennifer don't have children and plan to split their remaining assets between their favorite charities and their nieces and nephews.

The Outcome

Tim and Jennifer has some important decisions but thanks to our analysis they will be well informed of the trade-offs.

Sometimes retirement planning is about understanding options, trade-offs and risks.

Tim and Jennifer have substantial resources and ambitious goals. While a “best-case” scenario—featuring strong market performance and a sizable future inheritance—could enable them to retire now, they face the risk of falling short of their retirement goals if the markets underperform or the inheritance does not materialize.

In either case, there are considerable opportunities for tax planning, particularly given their location and the years remaining before they reach the age for required minimum distributions. Additionally, gaining a clearer understanding of the nature and timing of their inheritance will help them make well-informed decisions now, positioning themselves for long-term financial success.

The provided examples are fictitious and designed for illustrative purposes only. They are not intended to represent the experiences of any specific client or individual. Financial North Partners and NewEdge Advisors do not provide tax, legal, or accounting advice. You should consult your own tax, legal, and accounting professionals before making any decisions based on the strategies or concepts discussed.

132000

Estimated sustainable retirement income retiring in 5 years without an inheritance.

185000

Estimated sustainable retirement income retiring in 5 years with inheritance.

224000

Estimated sustainable retirement income retiring in 10 years with inheritance.
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