Sam Harrison, at 55, is at a crossroads. Having recently exited his last venture following a successful acquisition, he’s weighing his options: Should he embark on another entrepreneurial journey, or is it time to transition into retirement? With significant investable assets exceeding $15 million, Sam is well-positioned financially. However, over half of his wealth is tied up in a single stock with a low cost basis, raising important questions about how to manage capital gains while diversifying his portfolio.
Sam’s priorities extend beyond his own financial security—he has a daughter he’d like to support, provided it doesn’t jeopardize his own goals. At this pivotal moment, he’s seeking clarity on his future. By exploring strategic planning opportunities, such as tax-efficient diversification, estate planning, and retirement lifestyle options, Sam can make informed decisions that align with his aspirations. Whether he chooses to begin a new chapter or embrace the freedom to retire, the right guidance can help Sam build a roadmap for a fulfilling and secure future.
The Numbers
15745000
Investable Assets
7745000
In A Single Tech Stock
30000
Current Monthly Spending
Scenario Analysis
What did we look at?
The Outcome
Sam has built significant wealth, accompanied by the inherent tax and investment complexities. By utilizing a range of advanced portfolio and tax management strategies, he can confidently enjoy his retirement while ensuring his legacy remains intact for future generations.
Sometimes with the right strategies you can accomplish all of your goals.
Sam came to us with a common challenge faced by high-net-worth individuals: managing tax efficiency, portfolio diversification, and long-term legacy planning. To address his needs, we implemented a series of tailored strategies that not only reduced his financial complexities but also aligned with his goals for his family and future.
One solution was helping Sam gift appreciated stock to his daughter. This strategy allowed her to benefit from a lower tax bracket when selling the shares, while also reducing Sam’s taxable estate in a tax-efficient way. Additionally, we used an exchange fund replication strategy to diversify his concentrated stock position, minimizing downside risk without triggering tax consequences. To further optimize his plan, we capitalized on years with lower income by implementing Roth conversions, which significantly reduced his future required minimum distributions (RMDs). These strategies not only simplified Sam’s financial life but also positioned him to enjoy retirement while preserving his legacy for the next generation.
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.
380000
Estimated maximum sustainable retirement spending.
0
Years of additional work needed.
5,802,857
Estimated tax savings by gifting stock rather than cash over the next 40 years.