Intentional Wealth Management: A Case Study in Strategic Planning for Non-Planners

Introducing Lila and Victor

Lila and Victor, both in their mid-40s and living in Santa Barbara with their two teenagers, are successful medical professionals earning over $350,000 annually. The couple managed their finances independently for nearly 20 years when uncertainty crept in as their kids approached college age and they considered their retirement. While their assets were significant, the couple was beginning to question the effectiveness of their do-it-yourself financial strategy. 

As planning for the future became more daunting, they recognized the need for a strategic partner. The couple came to Monarch Wealth Strategies seeking a more comprehensive and informed financial plan to help them reach their goals and navigate the intricacies of investments, taxes, and rising salaries.

Challenges 

Upon meeting the couple, we found their financial situation disorganized and needing more clarity and direction. Despite their high incomes, the couple had overlooked opportunities to optimize their finances, including tax-saving possibilities and aligning their portfolio risk according to their goals.

In their DIY approach, the couple had reverted to advice online and apps to manage their finances. While these tools are appealing, the couple would benefit from tailored solutions to address their specific situation and income level. Accurate income projections were also a crucial missing element, leaving them unsure of the adequacy of their retirement and children’s 529 college saving plans.

Their substantial savings was spread across various accounts, so Lila and Victor didn’t have a clear overview of what they owned or how the assets worked together to help them reach their goals. With limited tax and financial planning knowledge, they didn’t leverage tax-efficient tactics or emerging investment strategies, exposing them to substantial tax liability. Additionally, they were unaware of how industry or tax law changes could affect their financial standing and overlooked new opportunities to enhance their position or avoid risks.

The Outcomes of Working with Monarch

The outcomes for Lila and Victor included peace of mind, defined objectives, and an adaptive strategy. 

As our partnership with Lila and Victor began, we initially focused on attentive listening and gaining an understanding of what they hoped to achieve. After a thorough audit of their finances, we found despite their high incomes, additional benefits, and steady careers, there were significant opportunities for enhancement. Recognizing Lila and Victor needed organization and alignment, our goal was to simplify their complicated finances and design an intentional wealth management plan. Here’s how we helped:

• • Complete Financial Analysis: We delved into their finances to evaluate existing assets and investments and perform a risk assessment.
  • Account Consolidation: With several assets dispersed across old 401(k)s and diverse investment and bank accounts, we recommended consolidation, reducing their accounts by nearly half. The new approach leveraged high-yield instruments for reserve and emergency funds and tax-advantaged vehicles for their long-term savings.
  • Portfolio Diversification: Identifying a concentration of investments that put them at unnecessary risk, we created a tax-effective selling plan that balanced their portfolio and set targets for returns. 
  • Reassessing Risk: Considering their peak asset accumulation years and ages, we guided them in reallocating risk and adopting a more aggressive position to help them reach their retirement and college goals.
  • Accurate Projections and Savings on Auto-Pilot: While they were relatively conservative spenders, without a clear financial plan or defined budget, the couple wasn’t reaching their full potential. We tracked their savings progress for retirement and their kids’ 529 college savings plans. With new insights into timelines and how much they should be saving, we established automatic savings, ensuring they maximized their excess income without feeling the impact on their daily lives.

With the trusted guidance of their dedicated wealth advisor and the entire Monarch team, the couple has a renewed confidence in their financial future and strategies to help them navigate unforeseen circumstances or new goals. They understand the significance of having experts in their corner and realize waiting another 10 years would have meant unnecessary time, money, and stress. In collaboration with Monarch, Lila and Victor have simplified their financial landscape and established a plan for financial success.

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