Client Profile: Could Your Financial Plan Handle a Single Income During a Major Career Change?Submitted by Washington Wealth Advisors | Falls Church and Ashburn, VA on February 2nd, 2017
By Todd Youngdahl, CFP®
At Washington Wealth Advisors, many of our clients are individuals and families who need help juggling the competing demands of planning for retirement, saving for college, paying high mortgages, and addressing all the other complexities of a busy life. In our profession, we are lucky to work with many of the same clients for years, if not decades, and get to know them well.
Today, I’d like to share a story of two of my first clients, Colette and Marcus Wilson. When we met about 15 years ago, they were expecting their first child and interested in a college savings plan. Through the years, we’ve worked together to plan for their children’s education, retirement, and to protect the family’s assets. But four years ago, Colette was ready for a big change.
Can I Afford to be a Stay at Home Mom?
Colette was like many of our clients, successful but very busy. She was a CPA and partner in her accounting firm. With two young children, she yearned to leave the corporate environment to spend more time with her family. She and her husband had decided that it would be best for their family for her to stay home with the children for a few years, but worried about how that would affect their financial plan.
“In 2012, I decided to leave my corporate job to be home with the kids. When I told Todd what I wanted, I was scared. As a significant contributor to the family income, it was a huge financial hit to leave my corporate job,” said Colette. “We really expected to hear that we’d have to sell our house to make things work. We were surprised when after looking through our savings and finances, Todd came up with a plan to make our new lifestyle work with one income. Marcus had a great job as an IT Administrator with state government which made the change more palatable.”
Creating a Plan
When the Wilson’s told me about their decision, the first thing we did was take a full assessment of the couple’s savings towards college and retirement. Fortunately, they had done a great job saving in their 529 plans and were on track with their retirement savings plans.
Because Colette was able to sell her partnership interest in the CPA firm, we had funds from the payout to work with. We put some of the money towards the college savings plans and her retirement plan, since we knew she wouldn’t be able to contribute once her income dropped. Then, we used the rest of the payout funds to create a “salary” for Colette to last for the next several years. We were able to create a plan to make their lifestyle work with one income, while not losing ground towards their larger financial goals.
“We knew we needed to make this shift for our family, but we didn’t want to take a huge financial step backwards. Todd was able to help us redirect our funds and put some extra money away so we could live the lifestyle we wanted without downsizing or moving. He created an explicit financial plan to use the funds as my ‘salary’ and also invest for the future to bridge the gap while I wasn’t working,” Colette explained.
“During this transition time, the family made another shift. Marcus desired to improve his work-life balance with a shorter commute and better work environment. This change came with a slight decrease in the family income, but again with Todd’s financial strategies and effective planning, we were unscathed by the change.”
She continued, “Looking back, we are still a bit surprised that all of this worked out! Now, four years later, I’m self employed and bringing in a solid income, Marcus is in a comfortable job close to home, and our family is doing well. We didn’t get behind during my time off and now we can afford to catch up on the bigger savings items.”
Starting a New Career
During her time as a stay at home mom, Colette realized that her true passion was serving others by cooking and catering. She dreamed about starting her own catering company, but she feared that she couldn’t make an adequate income doing what she really loved. In the years she was away from the corporate world, she learned how to launch her catering business and has made it a success. Today, she finds fulfillment in a better work-life balance and a career doing what she loves every day, while still maintaining her CPA license and volunteering within the accounting profession.
Why Washington Wealth Advisors?
Colette remarked on why she and Marcus chose our firm to entrust their financial future, “We are lucky to work with Todd first and foremost because we trust him. But he also has kids of his own, so he understands our competing savings demands. He listens to what we want, and we don’t want to save all the time! We love to spend and go on vacation, but he can tell us when we need to reduce to stay on track.”
Marcus and Colette have found that the Washington Wealth team is available throughout the year to help answer their questions. They have told us that they fully trust our advice and have relied on it for years. It’s taken a lot of hard work on Todd’s part to make sure their plan is robust and accurate. Colette said, “We know that if we follow it, we can be confident in our future. Our advice is that it’s never too late to start, but by starting early and following a strict plan, you can really set yourself up for success. The financial planning advice of where to save, how much to save, and when to make changes is invaluable for us.”
If you’re a client of Washington Wealth Advisors, you probably know that we aim to focus on your goals and dreams, instead of just your financial picture. Like many of our clients, The Wilson’s were on the right track financially, but shared that they wanted more professionally and personally. We took the time to clearly define her professional goals and to come up with a strategy to forecast what the career change would cost. If you have financial dreams that you haven’t pursued, we encourage you to share them with our team. Together, we can create a plan that aims to make your dreams a reality.
Thanks to Marcus and Colette for sharing their story. We are so happy that we’ve been able to have a positive impact on both your financial picture and your family’s happiness. If you’ve enjoyed working with us, we hope you’ll refer a friend, colleague, or family member who may benefit from our services. We are grateful for your loyalty and your praise of our services. You can also pass along this article to your friends and family and let them know we are happy to speak with them if they have any questions. Give us a call today at (703) 584-2700 or email us at firstname.lastname@example.org to schedule an appointment to sit down and discuss your unique needs.
About Washington Wealth Advisors
Washington Wealth Advisors is an independent registered investment advisory firm serving high net worth families and small businesses. We focus on holistic financial planning and comprehensive investment management. Leveraging our core strengths of unbiased, active investment management together with a detailed annual financial planning capability, we serve your comprehensive investment and financial planning needs.
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