Financial Planner Case Study: How Axon Helped Cynthia in Georgetown, TX

Meet Cynthia: Cynthia is a 65-year-old resident of Georgetown, TX, looking forward to retiring in the near future. She’s spent decades building her career (most recently as a school administrator) and diligently saving for retirement. Now, as retirement looms, she wants to ensure she can maintain her lifestyle, make the most of her savings, and not outlive her money. Cynthia is also a widowed mother and proud grandmother. She hopes to spend more time with family, perhaps travel a bit, and even help her grandchildren with college someday. But like many near-retirees, Cynthia has questions and concerns about whether she’s truly prepared to retire.

We met with Cynthia to guide her through a comprehensive financial planning process. In this case study, we’ll walk through Cynthia’s journey — from identifying her goals and challenges to crafting a detailed retirement plan — illustrating everything that goes into our financial planning service. This inside look is designed to help prospective clients understand how we help people like Cynthia achieve financial freedom with confidence. (All names and details are hypothetical for this educational example.)

Cynthia’s Profile and Retirement Goals

Let’s summarize Cynthia’s financial profile and goals:

• Age & Family: 65 years old, recently widowed. Two adult children and three young grandchildren (all living in Texas).

• Employment: School district administrator planning to retire within the next year. She will be eligible for Medicare and possibly a modest pension from the Texas Teachers Retirement System (TRS) in addition to Social Security.

• Assets: Approximately $1.1 million in retirement savings (a combination of a 403(b)/401(k) from work and rollover IRA), $200,000 in a taxable brokerage account (inherited from her late husband), plus about $50,000 in cash savings. She also has equity in her home, valued around $400,000, with no mortgage.

• Goals: Retire comfortably and not run out of money – she estimates needing about $60,000 per year after taxes to cover her expenses and some travel. She wants to maintain her lifestyle in Georgetown, including dining out, hobbies, and maybe a couple of big trips in early retirement. Another goal is to help her grandchildren with college funding or perhaps make annual gifts, but only if it won’t jeopardize her own security. Charitable giving is also important to her; she’s involved in her church and local charities.

• Concerns: She’s unsure how to draw down her savings in retirement — which accounts to tap first and how much she can safely withdraw each year. She worries about stock market ups and downs in retirement, since she remembers the 2008 recession and the 2020 pandemic volatility. Cynthia also isn’t confident about the investment strategy her late husband was using for the brokerage account (it contains a mix of individual stocks and mutual funds with no clear strategy). Taxes are another concern: “Will taxes take a big bite out of my 401(k) withdrawals? Can I reduce tax hits on my investments?” Additionally, being single, she wants to ensure her estate and beneficiary designations are in order so that her kids are taken care of. And of course, like many retirees, she wonders about health care costs – she’s healthy now, but what about long-term care or unexpected medical bills down the road?

By outlining these goals and concerns in our initial meetings, we established a clear picture of what matters most to Cynthia. The key question we needed to answer was: Can Cynthia retire now (or within a year) and still have her money last for the rest of her life while meeting her goals? To answer that, we embarked on a comprehensive financial planning process covering retirement income, investments, tax strategy, and more.

Challenges and Concerns We Identified

During our discovery phase with Cynthia (a deep-dive into all aspects of her finances and aspirations), we identified several specific challenges that our financial plan would need to address. These included:

• Uncertain Retirement Income Plan: Cynthia did not have a clear strategy for turning her savings into a steady paycheck. She was unsure how much she could safely withdraw each year without running out of money. This is often referred to as determining a “safe withdrawal rate.” Would the classic 4% rule work for her? (The 4% rule is a common guideline that says if you withdraw 4% of your portfolio in the first year of retirement, and adjust for inflation each year, your money should last ~30 years.) Cynthia wasn’t sure if 4% was appropriate, given her desire for a 25+ year retirement and possibly some larger expenditures early on. We needed to personalize this based on her actual portfolio and life expectancy.

• Timing Social Security and Pension: Cynthia was eligible for Social Security, but hadn’t filed yet. Her Full Retirement Age (FRA) is 66 years and a few months (for her birth year, FRA ~66-67). She could claim now at 65 (at a reduced benefit), wait until FRA for 100% of her benefit, or even delay to age 70 for a higher amount. We had to determine the optimal claiming strategy, especially as a widow — she had the option of a survivor benefit from her late husband’s Social Security record, which complicates the decision. Additionally, if she has a teacher’s pension (TRS) and did not pay into Social Security for those working years, we needed to consider any Windfall Elimination Provision (WEP) or Government Pension Offset rules that could affect her Social Security or survivor benefits. In short, Social Security timing was a puzzle to solve for maximizing lifetime income.

• Investment Portfolio Mix and Risk: Her investments were not unified under one strategy. The inherited brokerage account had a mix of stocks that her husband picked (including some oil & gas company stocks and various funds) – she didn’t know if it was too risky or not yielding enough. Her retirement accounts were mostly in target-date funds and a few bond funds. Overall, we suspected her portfolio might be imbalanced or not aligned with her current risk tolerance (which is moderate; she can’t afford major losses right before or after retirement). We identified the need to rebalance and possibly restructure her portfolio to ensure it’s appropriate for generating retirement income with lower volatility.

• Tax Efficiency Concerns: As she starts drawing from her 401(k)/IRA, those withdrawals will be taxable as ordinary income. She also might have to take Required Minimum Distributions (RMDs) in the future (now starting at age 73 for her, and even 75 for those a bit younger). These could be large and bump her into higher tax brackets if her accounts grow. Plus, her brokerage account can trigger capital gains taxes if we sell investments. Cynthia was unsure how to minimize taxes in retirement. Questions arose like: should she do Roth conversions before RMD age? How to tax-efficiently draw from taxable vs tax-deferred accounts? Could charitable giving help her tax situation (she’s charitably inclined)? We also noted that Texas has no state income tax, which is a boon for retirees – none of her retirement income will be taxed at the state level. But federal taxes and Medicare surcharges (IRMAA) are still a factor.

• Healthcare and Insurance: Retiring at 65 means Cynthia is eligible for Medicare. We needed to ensure she enrolls in Medicare on time and chooses the right supplemental coverage or Medicare Advantage plan to cover what Medicare doesn’t. Also, since she’s single, the risk and cost of long-term care is a big consideration – who would take care of her if she needed assisted living or nursing care in 20 years? She doesn’t currently have long-term care insurance. We had to build a plan for potential healthcare costs, including possibly setting aside funds or looking at insurance options while she’s still healthy.

• Estate and Legacy Planning: With her husband gone, Cynthia’s estate plan needed an update. Her will was older, and beneficiaries on her retirement accounts still listed her late husband as primary (and her kids as contingent). We saw a need to update beneficiary designations (to ensure assets pass directly to her children or a trust for her grandkids). Cynthia also expressed a wish to gift to her grandchildren – perhaps funding a 529 college savings plan or making annual cash gifts for education. The challenge was to structure this legacy gifting in a way that doesn’t jeopardize her own financial security. We also discussed charitable giving – she’d like to continue donating to her church and a local Georgetown charity. She’d heard of concepts like Qualified Charitable Distributions (QCDs) from IRAs (which one can do starting at 70½ to satisfy RMDs tax-free), and donor-advised funds, but wasn’t sure how these might fit into her plan.

In short, Cynthia’s situation required a truly holistic financial plan. It wasn’t just about investing her money; it involved retirement income planning, tax strategy, risk management, and aligning everything with her personal values (family and community). As a fee-only fiduciary advisor, our role was to provide unbiased, expert guidance across all these areas – always acting in her best interest. Now, let’s go through how we developed and implemented a plan to meet Cynthia’s needs.

Crafting a Comprehensive Retirement Plan for Cynthia

We tackled Cynthia’s planning in stages, following our firm’s structured process (intro meeting, discovery, planning, plan delivery, and ongoing support). Here’s how we addressed each major aspect of her financial life and the solutions we put in place:

1. Retirement Income & Cash Flow Planning

The foundation of Cynthia’s plan was determining how to convert her nest egg into a reliable retirement paycheck. We began by analyzing her expected expenses in retirement versus guaranteed income sources. Together, we created a detailed retirement budget, accounting for essential expenses (housing, food, utilities, insurance, property taxes, healthcare) as well as discretionary spending (travel, dining, gifts, hobbies). This gave us a target annual income need of about $60,000 after tax in the first year of retirement. We then looked at her income sources:

• Social Security: We evaluated different claiming scenarios. If Cynthia claimed her own Social Security at 65, she’d get, say, around $2,000/month (reduced because it’s before FRA). At FRA 66½, it might be $2,400/month, and if she waited until 70, around $3,000/month. As a widow, she could instead claim a survivor benefit on her late husband’s record, which could be higher or lower depending on his earnings. We used specialized software to compare the long-term benefit of various strategies. Solution: We decided Cynthia would claim a survivor benefit now (since her husband had a substantial Social Security benefit) and delay claiming her own Social Security until age 70, when it reaches its maximum. This strategy allows her to receive some income now (survivor benefit perhaps $2,200/month) and then switch to her own larger benefit (~$3,000/month) at 70. This maximization strategy made sense given her good health and desire to have more guaranteed income later in life (and since she doesn’t have a spouse depending on her benefit). We projected this will significantly increase her cumulative lifetime Social Security income if she lives into her 80s. (Every situation is unique; in Cynthia’s case the survivor benefit option was advantageous).

• Pension: Cynthia is eligible for a small pension from her years in the school district (TRS). It would provide $500/month for life if she starts at 65. We incorporated this fixed income into her plan starting immediately upon retirement. We also double-checked how this pension interacts with Social Security (thankfully, because she did pay into Social Security in other jobs and the survivor benefit was based on her husband’s work, WEP/GPO impact was minimal in her scenario).

• Portfolio Withdrawals: After accounting for the survivor benefit (~$26k/year) and pension (~$6k/year), there was still a gap of about $28,000 per year to meet her $60k after-tax spending goal. This gap would be filled by withdrawals from her investment portfolio. We ran cash-flow projections using conservative assumptions (for example, portfolio returns of ~5-6% and inflation 2-3%). We used Monte Carlo simulations as well – these run 1,000+ random market scenarios to see the probability of her money lasting to age 95. Initially, an annual withdrawal of around $30k from her $1.3M total portfolio (which is roughly a 2.3% withdrawal rate in year one) looked very sustainable. Even if we factor in future increases for inflation, this is well below the classic 4% threshold, giving her a high probability (90%+) of not outliving her funds. In fact, our analysis showed she could likely spend a bit more (maybe up to $70k/year) and still be safe, but Cynthia was more comfortable erring on the side of caution. We settled on a withdrawal plan of around 3% of her portfolio in the first year of retirement, with adjustments as needed. This translates to withdrawing roughly $40,000 in year one from her investments, on top of her other income, to net about $60k after taxes. We assured her that, by following a prudent withdrawal strategy (and being flexible if market conditions change), she can have confidence that her savings will support a 30-year retirement or longer.

• Withdrawal Sequence & Buckets: A key part of income planning is deciding which accounts to tap first. We implemented a tax-efficient withdrawal sequence: In the early years (65-70), before her own Social Security starts, Cynthia will draw more from her taxable brokerage account for income needs (tapping dividends, interest, and selling some investments – taking advantage of low capital gains tax rates since her taxable income will be relatively moderate). This covers part of the gap and also gradually reduces that account. The rest of her need we’ll cover by IRA withdrawals (traditional IRA/401k) up to a level that keeps her in a lower tax bracket (we aim to utilize, for example, the 12% federal tax bracket room). By using the taxable account first, we let her tax-deferred IRA keep growing a bit longer and minimize near-term taxes (since withdrawals from the IRA are fully taxable, whereas selling assets from the brokerage can often be at lower capital gains rates and she has some cost basis step-up from inheritance). Essentially, we created a “bucket strategy”: a cash bucket (we ensured she set aside about 1-2 years of cash needs in a savings account for safety), an income bucket (dividend-paying funds and bonds for the next 3-5 years of cash flow in her taxable account), and a growth bucket (stocks/equities in her IRA for long-term growth). This bucket approach helps manage sequence-of-return risk (so a market downturn in early retirement doesn’t force her to sell stocks at a bad time – she has cash and bonds to draw from first).

By carefully coordinating these income streams, we mapped out a year-by-year plan for Cynthia’s cash flow. The goal was to ensure she receives a steady “paycheck” in retirement that covers her needs, with modest increases for inflation. Our plan also built in guardrails – for example, if the portfolio underperforms significantly, we might recommend Cynthia trim discretionary spending or delay a big trip, and conversely if markets do well, she can give herself a raise or gift more. This dynamic planning provides flexibility rather than a rigid rule, which is important because real life isn’t as simple as withdrawing the same inflation-adjusted amount every year. Cynthia appreciated that we weren’t just giving her a one-time number, but a responsive strategy that we’ll monitor together annually.

2. Optimizing Social Security and Medicare

It’s worth elaborating on Social Security and Medicare, since these are critical elements for any retiree:

• Social Security Strategy: As mentioned, we chose to have Cynthia utilize her widow’s Social Security benefit first and delay her own benefit until 70. This decision was based on calculations that showed a higher cumulative benefit by maximizing the larger of the two benefits (her own). It also provided longevity insurance – if Cynthia lives into her 90s, the bigger checks later on will be very valuable (and if she doesn’t, her survivor benefit collected in the early years ensures she at least got that value). We walked her through breakeven ages and found she’d come out ahead if she lived past roughly age 82 with this plan. Importantly, we coordinated this with her withdrawals: using more of her savings in the early years (65-70) while her own Social Security is deferred. This is sometimes called a “bridge strategy” – bridging the income gap with assets so that you can delay Social Security for a higher payout. This made sense for Cynthia due to her asset level and good health.

• Medicare Enrollment: We guided Cynthia through signing up for Medicare Part A and Part B when she retires (since she’ll lose her employer health coverage). We reviewed Medigap (Medicare Supplement) vs. Medicare Advantage options available in Williamson County. Ultimately, she chose a Medigap Plan G with a Part D prescription plan, to give her broad coverage and predictable costs. We included about $4,000/year in her budget for Medicare premiums, supplements, and out-of-pocket healthcare. We also discussed the importance of Medicare’s Income-Related Monthly Adjustment Amount (IRMAA) – since IRMAA surcharges can raise Medicare premiums if your income is above certain thresholds. Our tax-aware withdrawal strategy is mindful of keeping her taxable income below those thresholds when possible. For example, we wouldn’t do an excessively large Roth conversion in one year that would spike her income and trigger high Medicare premiums two years later. This is a nuance many retirees overlook, but it’s part of our planning to avoid “tax torpedoes” or unexpected costs.

• Healthcare and Long-Term Care: We reviewed her current health insurance and ensured a smooth transition to Medicare. We also talked about long-term care planning. Cynthia doesn’t have a long-term care insurance policy (many people her age don’t, due to cost or health underwriting). We explored whether it made sense to purchase one at 65 – but the premiums for a decent policy were quite high. Instead, Cynthia decided to self-insure using her assets: essentially, earmarking a portion of her investments for potential long-term care needs in her 80s or 90s. We adjusted her investment allocation to include some stable assets that could be used later for care if needed. Additionally, we discussed home equity as a fallback; her home value is substantial, and one day she could consider a reverse mortgage or selling the home (perhaps moving into a senior community) to free up funds for care. Having these discussions early gave Cynthia peace of mind that even a “worst-case” health scenario was considered in her plan.

By making informed choices about Social Security and healthcare, Cynthia was able to maximize her retirement benefits and avoid common pitfalls. She remarked that these were areas she “didn’t know what she didn’t know,” and having a plan in place lifted a weight off her shoulders.

3. Investment Management Strategy

With her income plan mapped out, we turned to revamping Cynthia’s investment portfolio. Investment management is a core part of our services – we aim to align each client’s portfolio with their goals, time horizon, and comfort with risk. For Cynthia, that meant transitioning from an accumulation-focused portfolio to one optimized for retirement income and capital preservation, while still growing enough to outpace inflation.

Here’s how we addressed her investments:

• Consolidation and Simplification: Cynthia had multiple accounts – a 403(b) from her school job, an IRA rollover from a previous job, and that taxable brokerage account held at a commercial brokerage. We helped her consolidate accounts for easier management. We rolled over the 403(b) into her IRA, combining her tax-deferred funds. We also updated the ownership and information on her joint brokerage account to reflect her status (it was a joint account with her late husband; now it’s solely in her name with a stepped-up cost basis on the inherited assets). Simplifying to fewer accounts (an IRA and a brokerage) makes it easier to execute a coherent strategy and track everything.

• Risk Assessment: We revisited Cynthia’s risk tolerance and capacity now that she’s entering retirement. While she’s not completely risk-averse, she cannot afford large losses on the eve of retirement (the so-called “sequence of returns” risk is highest early in retirement — a bad market early on can be very detrimental if withdrawals are happening simultaneously). Her previous allocation (we found it was roughly 70% stocks across all accounts) was a bit aggressive for her stage in life, especially with no strategy behind it. We decided to moderate her risk to about 50-60% in equities, 40-50% in fixed income and cash, as a starting point. This aligns with typical retirement allocations but was personalized to her comfort and the fact she has a long horizon (potentially 30 years). It provides growth potential but also stability.

• Diversification and Rebalancing: We built a globally diversified portfolio for Cynthia. In her IRA, we focused on low-cost, diversified funds – for example, a mix of broad U.S. stock index funds and international stock funds for the equity portion, and high-quality bond funds for the fixed income portion. We also included an allocation to real estate (REIT fund) and some inflation-protected bonds (TIPS) to add diversification. In her taxable account, we chose tax-efficient investments: for instance, a municipal bond fund (since muni interest is tax-free federally, which helps reduce taxable income) and some equity index funds with low turnover (to minimize capital gains). We also kept about $20k in a high-yield savings for near-term needs. One big change was dealing with the individual stocks she inherited – there were a few large positions (two energy company stocks and one pharma stock) that made up about 30% of that account. That’s a lot of single-stock risk. We crafted a plan to gradually liquidate and diversify those holdings. Over the next 6-12 months, we would sell portions of those stocks (being mindful of capital gains). The good news: since these were inherited, they benefited from a step-up in cost basis, meaning their tax cost basis was the value at the time of her husband’s death. That greatly reduced the unrealized capital gains, so selling them wouldn’t trigger huge taxes – another reason why timely rebalancing was smart. By reallocating those into diversified funds, we reduced her concentrated risk.

• Income Generation: Because Cynthia will be withdrawing from these investments, we positioned the portfolio for income generation as well. The bond funds and dividend stock funds will produce regular interest/dividends. We set those in the taxable account to pay out to her bank (for instance, bond interest flows into her checking to help cover monthly expenses). In the IRA, we’ll reinvest dividends for growth since that’s more long-term. We wanted to ensure that between her pension, Social Security survivor benefit, and portfolio income, she has enough coming in monthly to feel like a “paycheck.” Any additional needed, we can raise by selling some fund shares a few times a year (which we align with her tax plan). All this is communicated to her clearly, so she knows which bucket to tap and when, without constantly worrying about market movements.

• Tax-Aware Moves: We also implemented some tax-efficient strategies in the investment management. For example, we plan to take advantage of Roth conversions in the early retirement years. Each year from 65 to 72 (before RMDs start), we will assess if Cynthia has room in her current tax bracket to convert a portion of her traditional IRA to a Roth IRA. The idea is to slowly “fill up” the lower tax brackets with Roth conversions. This will reduce the size of her taxable IRA and thereby reduce future RMDs (which can be large tax hits in her 70s). Any converted amounts will grow tax-free in the Roth, and after 5 years or age 59½ (already met), withdrawals are tax-free. We executed a conversion of $30,000 in the first year (taxable but manageable since her other income was relatively low). We plan similar amounts each year, adjusting based on tax brackets and Medicare IRMAA limits. Over time, this could save her tens of thousands in lifetime taxes and give her more flexibility (Roth funds for later in life or to leave to heirs tax-free). Meanwhile, within the taxable brokerage, we will do tax-loss harvesting if the market dips – selling any investments at a loss to offset gains, which can further reduce taxes. These proactive tax strategies are part of our ongoing investment management, integrated with her financial plan.

• Ongoing Management and Rebalancing: We set expectations with Cynthia that we’ll continuously monitor and rebalance her portfolio. For example, if stocks have a great year and suddenly her mix drifts to 70% stocks, we’ll trim and rebalance back to target to maintain her risk level. If, conversely, the market drops, we may rebalance by buying stocks at lower prices (and we have her cash bucket as a safety net in the meantime). This disciplined approach means she doesn’t have to make emotional decisions in turbulent markets – we handle the adjustments according to a plan. We also provide clear reporting and communication, so she always knows where she stands. We’ve set up quarterly review calls to discuss performance, any changes in her life, and any needed tweaks. For instance, when she gets about 10 years into retirement, we might start gradually dialing down stock exposure further to reduce volatility as she ages.

By implementing this investment strategy, Cynthia’s portfolio is now aligned with her retirement goals: it’s built to provide sustainable income, manage risk, and incorporate tax efficiency. She expressed that she sleeps better at night knowing there’s a professional strategy in place, instead of the ad-hoc mix she had before. Moreover, as a fee-only fiduciary advisor, we reminded her that our investment advice is solely in her best interest – no commissions, no product sales, just transparent management where she pays a percentage fee for ongoing advice. This transparency further built her trust that the strategy wasn’t about us “chasing returns” or selling something, but truly about achieving her goals with peace of mind.

4. Tax Planning Strategies

We’ve touched on taxes throughout, but it’s worth highlighting how tax planning was integral to Cynthia’s plan. In retirement, smart tax planning can significantly extend the longevity of a portfolio. Our approach for Cynthia included:

• Leveraging Texas Tax Advantages: First, we confirmed for Cynthia that living in Texas is a plus – there’s no state income tax in Texas, which means none of her retirement income (Social Security, IRA withdrawals, pension, etc.) will be taxed at the state level. Also, Texas has no estate or inheritance tax. This was good news and something we often remind our retiree clients in Georgetown: more of your money stays in your pocket. We did, however, note the trade-off that property taxes in Central Texas can be high. Cynthia’s property tax on her home is about $6,000/year. We ensured she’s taking advantage of the homestead exemption and the additional age 65+ homeowner exemption Williamson County offers, which can cap or reduce property taxes. Those savings were factored into her budget.

• Roth Conversions: As described in the investment section, a major tax strategy is doing incremental Roth conversions before age 73. By moving money from her IRA to a Roth and paying some tax now at a relatively low 12% rate, we expect to reduce the tax hit later when RMDs and full Social Security kick in (when she could be in a 22%+ bracket). Over the next 8 years, we aim to convert a total of perhaps $200,000 of her IRA. This could slash her RMDs in her 70s and also create a pot of tax-free money she can use in late retirement (or not use and leave to heirs). We carefully coordinate these conversions with her overall income – each year we calculate the optimal amount to convert without pushing her into the next tax bracket or causing an IRMAA Medicare surcharge. This is a nuanced yearly decision and part of our ongoing planning service.

• Tax-Efficient Withdrawals: We structured her withdrawals to minimize taxes as much as possible. For example, by using taxable account funds early on, we utilize the low capital gains rates (0% to 15% for her income level) instead of all ordinary income. When selling from her brokerage, we can select specific tax lots (thanks to stepped-up basis, many shares have minimal gains). We also aim to realize some gains each year up to the 0% capital gains threshold (since the 0% rate applies until her total income hits a certain level). This essentially allows her to take tax-free capital gains and “reset” basis higher, which is a neat tactic for retirees in lower brackets. Additionally, any sizable medical expense or charitable donation in a year can be used to offset IRA withdrawal taxes by doing a larger withdrawal that year (taking advantage of deductions). It’s all about being proactive rather than reactive with taxes.

• Qualified Charitable Distributions (QCDs): Cynthia tithed to her church and donated to a local food pantry annually. We noted that once she turns 70½, she can do QCDs from her IRA – basically, direct transfers from her IRA to a qualified charity. The benefit is that those distributions won’t count as taxable income and will count toward her RMD once she has them. This is a highly tax-efficient way to give to charity for IRA owners. In Cynthia’s plan, once she hits 70½, we’ve outlined that she should funnel her charitable giving through her IRA up to $100k/yr if she desires (she’s likely to give much less than that, maybe $5k/year, but even that helps). This will reduce her future RMD taxable amount and satisfy her philanthropic goals. We’ve educated her on how it works and will assist in executing those when the time comes.

• Charitable Bunching / Donor-Advised Fund: In the years before 70, since she’s delaying Social Security and has lower income, her charitable contributions didn’t provide a tax deduction (because she takes the standard deduction which is relatively high, especially with an extra +$1,850 senior deduction). We discussed a strategy of “bunching” donations – for instance, contributing several years’ worth of gifts in one year to exceed the standard deduction and itemize that year. One way is via a Donor-Advised Fund. Cynthia liked this idea: in one of her higher income years (perhaps when we do a larger Roth conversion pushing her into the 22% bracket slightly), she could contribute, say, $10,000 to a DAF. She’d get a deduction that year, and then she can grant that money out to her church and charity over the next few years at $2,500/yr. This way she maximizes the tax benefit of her giving. It’s a bit advanced, but as her advisor, we keep these tools in our toolkit to deploy when advantageous.

• Reviewing Tax Returns and Ongoing Planning: Part of our tax planning service is to annually review Cynthia’s tax return (with her CPA or by ourselves if needed) to look for any missed opportunities or adjustments for the next year. For example, after her first year of retirement, we checked if her withholding and quarterly estimates were on track so she wouldn’t have a big bill or penalty. We also verified she got the full tax benefit of the strategies we did. This iterative process ensures no surprises and captures new opportunities (tax laws change, and we stay on top of those for our clients).

Overall, through these strategies, we aimed to minimize Cynthia’s lifetime tax burden, which effectively stretches her retirement dollars further. Tax savings can be significant: for instance, by converting to Roth at 12% tax now instead of facing 22% later, and by avoiding high RMD income in her 70s, Cynthia could save tens of thousands in taxes and also potentially avoid things like Medicare surcharges. It’s not just about paying less tax – it’s about improving her net cash flow in retirement. Cynthia admitted she would never have thought of some of these tactics on her own. This underscored to her the value of having a planner who looks at the whole picture (investments + taxes + retirement rules) rather than treating any piece in isolation.

5. Estate Planning and Legacy Goals

The final piece of Cynthia’s comprehensive plan addressed her estate and legacy wishes. Financial planning isn’t complete until we consider what happens with one’s assets in the long term, including end-of-life and beyond. We guided Cynthia through several important steps:

• Estate Document Review: We reviewed her current estate documents. She had a will that was over 10 years old, naming her husband (deceased) as executor and primary beneficiary – clearly out of date. We recommended she work with an estate attorney (we provided a referral in Georgetown) to update her will, and also put in place powers of attorney for financial and healthcare decisions (naming her eldest daughter as agent). Within her will, she chose to specify that her assets ultimately go to her two children in equal share, with any share that a pre-deceased child leaves behind going to those grandchildren. We discussed the option of setting up a revocable living trust for probate avoidance; given the size of her estate and that her assets are mostly in beneficiary-designated accounts, a trust wasn’t absolutely necessary, but she decided to establish one for added smoothness (this can be helpful since she owns a home; transferring it to a trust can avoid a court process later). We coordinated with the attorney by providing information on her accounts and how they should align with the estate plan.

• Beneficiary Updates: Perhaps the quickest, high-impact fix we did was updating beneficiary designations on her financial accounts. We made sure her IRA and 401k now list her two children as primary beneficiaries (per stirpes, to cover grandchildren if something happened to a child). Her brokerage account was changed to a Transfer on Death (TOD) registration, naming the kids as TOD beneficiaries. We also discussed adding her daughter as a payable-on-death beneficiary on her bank account. These steps ensure that the bulk of her assets will pass directly to her heirs without delays, and according to her wishes. Cynthia found relief in knowing that if something happened to her, her family wouldn’t have additional hassles in accessing funds.

• Gifting to Grandchildren: Cynthia’s desire to help her grandkids with college was an important goal. We evaluated a couple of ways: outright annual gifts, versus funding college savings plans. We decided to open a 529 College Savings Plan for each grandchild (she has three, ages 5, 7, and 10). Cynthia committed to contribute $5,000 per year total (split among the 529s) for as long as she comfortably can. We chose the Texas College Savings Plan (or another low-cost 529) and set up automatic contributions. These contributions qualify for the annual gift tax exclusion (which is $17,000 per beneficiary in 2023, well above what she’s gifting) so no gift tax issues. Over time, this should accumulate to a meaningful sum for each child’s education. We showed her that if she does $5k/yr for 10 years (about $50k total), given growth, it could grow to ~$70k which would be a nice help for tuition. More importantly, we built this gifting into her budget – the $5k/year is included in that $60k need. We made sure that this generosity doesn’t derail her own retirement security. In fact, our projections with and without gifting showed only a minor difference, which reassured her that she can afford to do this. She was thrilled to start this legacy of education for her grandkids.

• Charitable Giving Plan: For her charitable goals, we set up a plan as discussed (either bunching into a DAF or doing direct giving). In the immediate term, she’ll keep giving $3,000/yr to her church and charities from her cash flow (we included that in her expense needs). Later, once RMDs begin, we plan to switch those to Qualified Charitable Distributions from her IRA to be even more tax-effective. We’ve documented in her financial plan what method to use each year. Additionally, in her will, she decided to leave 10% of her remaining estate to her church’s endowment – a charitable bequest that aligns with her values. We accounted for that in her estate projections (it will slightly reduce what goes to the kids, but they are comfortable and supportive of her philanthropy).

• Insurance and Survivor Needs: We reviewed if Cynthia had any life insurance or annuities. She had a small life insurance policy (a leftover term policy from years ago) that was ending soon – no need to replace it since no one is financially dependent on her now. We advised her to keep paying her long-term disability policy until retirement (just in case she keeps working a few more months), but that will end once she stops working. We also discussed funeral planning and setting aside a small amount for final expenses or considering pre-need insurance. Cynthia set aside $15k in a payable-on-death bank account for that purpose so her kids won’t have to worry about funeral costs.

By taking these estate and legacy planning steps, Cynthia not only secured her own peace of mind but also set up her family for a smoother future. It’s often emotional to discuss these things, but we guided the conversation with professionalism and care. We reminded Cynthia that part of being a holistic financial planner is helping with these “what-if” scenarios and making sure all aspects of her financial life are in order – not just the investments. In the end, Cynthia expressed relief knowing that her affairs are updated and that her money will go where she wants it to. She found joy in knowing she’s helping her grandchildren and community along the way, without jeopardizing her retirement – which was exactly the balance she hoped to strike.

Outcome: Cynthia’s Confident Retirement

After implementing the various strategies above, Cynthia’s financial plan came together in a way that gave her clarity and confidence about her retirement. Let’s recap the outcome and benefits of our planning work with Cynthia:

• Retirement Readiness: We determined that Cynthia can comfortably retire as planned (at age 65). In fact, with our income plan, she is on track to meet her needs with some cushion. Her projected income covers her expenses, including healthcare and taxes, and even allows an extra buffer for discretionary spending each year. Knowing this, Cynthia felt confident to submit her retirement papers to her employer and set a retirement date. She said the assurance from our analysis was what she needed to “finally pull the trigger” on retiring. No more second-guessing or feeling in limbo.

• A Personalized Roadmap: We delivered to Cynthia a written financial plan – essentially a roadmap detailing all the elements: her retirement cash flow projections, Social Security timing plan, investment allocation targets, tax strategy timeline, and estate plan notes. We went over it together in a plan delivery meeting, ensuring she understood each part. This wasn’t a generic printout, but a tailored plan reflecting her life and goals. Cynthia commented that it felt great to see everything laid out in one place – she could finally see how all the pieces fit together. This sense of organization and direction reduced her stress immensely.

• Streamlined Finances: By consolidating accounts and setting up automatic processes (like transfers for her “retirement paycheck”, auto 529 contributions, etc.), we simplified Cynthia’s financial life. What once felt scattered is now streamlined. She can log into one primary platform to see her investments. She receives a single, easy-to-follow quarterly report. The mental burden of managing multiple statements and trying to coordinate things on her own is gone. She knows we are keeping an eye on the details, which frees her to enjoy retirement rather than constantly manage money.

• Improved Portfolio and Lower Costs: Her new investment portfolio is diversified and aligned with her risk tolerance. Importantly, the shift to low-cost index funds and ETFs reduced the fees and expenses she was paying on investments (some of her old funds were actively managed with high fees; we replaced many with index funds at a fraction of the cost). Over time, these savings themselves add a bit to her returns. She also now has a clear understanding of why we chose each investment and how it supports her goals (e.g., bonds for stability and income, stocks for growth and beating inflation, etc.). The portfolio is no longer a source of anxiety but a tool working for her.

• Tax Savings: Through our tax planning, we estimate Cynthia will save a substantial amount in taxes over her retirement. For example, the first Roth conversion we did ($30k) will save her perhaps $6k in future taxes on RMDs. Over a decade of conversions, the savings could be in the tens of thousands. Plus, using QCDs for her charity later will save her a few thousand each year in taxes once started. All of this means more money stays in Cynthia’s pocket to fund her lifestyle. Also, by avoiding high taxable income spikes, we likely saved her from ever hitting Medicare IRMAA surcharges or the Social Security tax torpedo (where too much IRA withdrawal makes Social Security taxable at a high effective rate). In short, her tax strategy is smooth and efficient.

• Peace of Mind and Emotional Security: Perhaps the most important outcome is that Cynthia feels secure and empowered about her financial future. Instead of worry, she has a solid plan. She knows she can weather market swings because there’s a strategy (and a professional) in place to handle them. She knows exactly where her “paycheck” will come from each month. She has a plan for healthcare and contingencies. And she has taken care of her legacy wishes, which gives her a sense of fulfillment – she’s not only taking care of herself, but also setting up her loved ones for success. This emotional peace of mind is hard to quantify, but it’s clearly visible. Cynthia told us she feels like a “huge weight is off her shoulders” and that she’s now genuinely excited about retirement, whereas before she was anxious.

Finally, we made sure Cynthia understood that financial planning is not a one-time event, but an ongoing relationship. We remain by her side as her advisor. We set up regular check-ins (at least annually, with the door open to reach out anytime). Life happens – tax laws could change, markets will change, her personal life could evolve – and we will adapt the plan accordingly. For example, if she decides to move closer to one of her kids in a few years or if she wants to buy a small RV to travel, we’ll revisit the plan and adjust. She knows she’s not alone in navigating these decisions. This ongoing support is a cornerstone of how we serve clients, and Cynthia now experiences that firsthand. Financial planning is an ongoing journey, and we are her partner in it every step of the way.

The Axon Difference and Conclusion

Cynthia’s case study illustrates the depth and breadth of a comprehensive financial planning engagement with our firm, Axon Capital Management. We pride ourselves on being a fee-only, fiduciary financial advisor. That means our only agenda is our client’s best interest – just as we did with Cynthia, we take a holistic approach to each person’s financial life. We don’t sell products or earn commissions; instead, we offer expertise and guidance, acting as a trusted partner in your financial journey.

A few key aspects make our approach distinct:

• Personalized Planning: There is no one-size-fits-all here. Cynthia’s plan was uniquely tailored to her goals, assets, and values. Whether it’s a retirement income plan, investment strategy, or tax plan, we customize it. In Cynthia’s case, that meant factoring in her widow benefits, her desire to gift to grandkids, her comfort level with risk – her life drove the plan design.

• Comprehensive Service: We covered all bases – retirement planning, investment management, tax planning, estate considerations – under one roof. Many “typical” advisors might focus only on investments, but leave out tax or estate advice. We believe true financial success comes from addressing the whole picture (we often call it holistic wealth management). This comprehensive approach is especially beneficial in a community like Georgetown where retirees face decisions about Social Security, property downsizing, etc., that cut across different financial domains.

• Education and Clarity: Throughout the process, we educated Cynthia in plain language, helping her understand the why behind each recommendation. We answered every question she had (“What’s a Roth conversion? Why not claim Social Security now?”) until she felt comfortable. Our goal is that clients not only have a plan but also feel informed and in control. As Cynthia now goes into retirement, she does so with increased financial literacy and confidence.

• Local Expertise: Being based in Georgetown, we have a strong grasp of local factors that affect our clients. For instance, we understand Sun City and the influx of retirees here, the Texas-specific retirement rules (like TRS pensions or lack of state tax), and even local investment opportunities or housing trends. We know that Georgetown’s cost of living and community resources might influence a client’s plan.  

• Fiduciary Commitment and Trustworthiness: At every step, Cynthia knew we were sitting on the same side of the table as her. We laid out our pricing transparently (for ongoing planning and investment management, we charge a percentage of assets under management as described on our website, and we explained to her exactly what that fee would be). There were no surprises or hidden commissions. This structure aligns our success with hers. Our fiduciary oath means we must put her interests first, and we embrace that fully as part of our firm culture. This professional and trustworthy approach helped Cynthia (and our other clients) feel comfortable sharing every detail of their financial life, which in turn allows us to do a better job with the plan. It creates a strong advisor-client partnership built on integrity.

In conclusion, Cynthia’s story has a happy trajectory: she is now officially retired and enjoying the life she envisioned – volunteering at her church, spending more time with her grandchildren (she even started a tradition of “Grandma’s trip” each year, taking each grandkid on a special outing when they turn 10), and exploring Texas Hill Country with friends. The financial stress that once kept her up at night has diminished greatly. Of course, she still watches her budget and the markets, but she knows there’s a strategy in place and a trusted advisor monitoring things. Whenever a question arises, she reaches out to us and gets guidance.

If you’re reading this case study and see parallels to your own life – perhaps you’re nearing retirement or recently retired and feeling unsure about your financial roadmap – we invite you to reach out to Axon Capital Management. Whether you’re in Georgetown, TX like Cynthia, or anywhere in the Greater Austin area, we’re here to help individuals and families plan for a secure future. We offer financial planning, retirement planning, investment management, and tax planning services tailored to your situation, with the same level of detail and care described above.  

Article written by Brady Lochte, Financial Advisor at Axon Capital Management

Plan Your Future with Confidence: Retirement is called the “golden years” for a reason – it’s time to reap the rewards of your hard work. With a sound financial plan, you can spend those years focusing on what matters most to you. Just as we helped Cynthia create a roadmap to financial freedom, we can do the same for you. Feel free to schedule a call with us to discuss your goals. Let’s write the next chapter of your financial story, so you too can retire with peace of mind and excitement for the years ahead.

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Axon Capital Management is a registered investment advisory firm. This case study is a hypothetical illustration of our planning process and the potential benefits of comprehensive financial planning. It does not represent an actual client and is not a guarantee of future results for any client or reader. The content in this article is not financial, legal, or tax advice. Individual situations will vary. For more information or to discuss your own financial goals, feel free to contact us by filling out the form below.

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