Tom and Karen Sterling

Age: 59 and 68
Horizon Ridge Services: Senior Care Planning, Asset Management, Retirement Planning

Tom and Karen Sterling are 59 and 68 years old, respectively.  This is both Tom and Karen’s second marriage.  They have been married for 15 years.  Tom never had children while Karen had three boys.  Bill is the oldest at 41 years old, Casey is 39 years old, and Kurt is 35 years old.  Tom is a government employee who works for the Department of Homeland Security.  He will reach 30 years with the government when he is 68 years old.  Prior to joining the government he retired after 20 years with the Army as a Lieutenant Colonel.  Karen was a pediatrician for 30 years before selling her practice and retiring at 65 years old.  Now she volunteers her time at Women’s abuse clinics and medical clinics serving low income families. Since the kids are grown and are successful in their own right, Tom and Karen would like to enjoy the time they have left together.  They understand their age difference will present some difficulty as Tom plans to work for another nine years. 

They came to us with the following concerns:

  • How to minimize income taxes both today and in retirement
  • How to develop an appropriate income plan to fund retirement
  • They would like to build a senior care plan since Karen is almost 10 years older
  • Ensure their respective financial assets are left to the desired recipients

When Tom retires the family will have a six-figure fixed household income due to Tom’s military pension, government pension, and both of their Social Security payments.  In addition to their guaranteed income, they both have a liquid net worth over $4 million dollars which they currently believe they will not have to rely on in retirement.  They are concerned about leaving a large sum of money to their heirs without specific guidelines in place.  While the three boys are well off, Karen worries about the spending habits of their spouses.  Tom on the other hand doesn’t care what happens to the investments because they will be dead however he wants to leave a large portion of his investments to his nieces and to his alma mater.  They are not sure how to set up an estate strategy to achieve their objectives and also feel the need to make sure they are adequately planning for all goals. 

After the first meeting with Tom and Karen, several follow-up meetings were spent uncovering their concerns and designing a financial plan that addressed their retirement, tax, investment, and estate planning concerns.  We worked closely with their elder care attorney to update their estate documents and design a long term care transition plan.  While they could self-insure against long term care costs in the future, they saw how much their parents spent on care and wanted to transfer part of the cost to an insurance company so more could go to their heirs.  Additionally, as they had a blended family they did not want the children and nieces to fight over their financial estate.  For these reasons the attorney worked to draft estate documents that provided for both spouses during their individual lives and in the event of one spouse pre-decreasing the other.

After our work together, the Sterlings felt their financial affairs were in order, their investment accounts strategically diversified to reduce their risk while optimizing returns, and their elder care transition plan was in place for when they needed it.

This material is hypothetical in nature and not intended for use as investment advice.  It does not guarantee the attainment of your retirement goals.  Individual results may vary.  There is no assurance that any investment strategy will be successful.  Investing involves risk and investors may incur a profit or a loss.  Asset Allocation and diversification do not ensure a profit or protect against a loss.  Past performance is not indicative of future results.