Who Is A Typical Safe Harbor Client?
To help you determine if Safe Harbor is the right firm for your financial needs, let’s look at some typical Safe Harbor clients.
As on TV shows, the names (and situations) have been changed a bit for client privacy.
1
Second Opinions.
Brenda and Eddie are in their late 50s and have saved well in both retirement accounts and non-retirement investments. Due to job changes they each have several old 401k plans and an IRA or two. They want to make sure they are on track for retirement in the next 2-3 years, and also want an assessment of their investments and any changes they should make. Brenda and Eddie are excellent clients for our hourly/project fee services. We have several topic-specific projects that would apply to their situation.
2
Concerned About the Saving to Spending Transition in Retirement.
Woody and Buzz have had different perspectives on spending money during their marriage. Woody has always been the frugal one while Buzz has been more willing to spend money on things that are important to him (and to Woody—at least in Buzz’ view). As they are approaching retirement within about 2 years or so they are concerned that they don’t have a good feel for how much they can afford to spend, and Woody in particular is worried about running out of money in what could be a long period of retirement. They are potentially a good fit for an initial retirement readiness project and then possibly a transition to an ongoing service program. That process starts off with an analysis of their current financial situation, spending habits, investments, debt, etc., and then recommendations on changes to their investment portfolio, development of a retirement income plan of action, and recommendations on election of Social Security and other benefits. From that baseline assessment project, Woody and Buzz can choose to work with our partners at Black Diamond Financial Solutions, Inc. for ongoing financial planning and portfolio management. In conjunction with Black Diamond, Safe Harbor would continue to work with them on a systematic annual basis with a focus on their cash flow/spending and devising an annual Thriving in Retirement Income Plan (or TRIP plan). This TRIP plan is a tax-focused approach that seeks the most efficient way to use their resources for income and allow them to maximize their retirement adventure. The various touch points during the year with the Black Diamond/Safe Harbor team also help the couple better adapt to the changes this life transition brings.
3
Ready to Retire—But Life Intervened!
Sam and Diane were looking forward to Sam’s retirement in a few years after many years working for the government. His pension will be generous, and he had saved quite a bit in the Federal Thrift Savings Plan as well. They have travel plans that would involve both overseas visits and time spent with their children and grandchildren in Florida and Arizona. Then things changed dramatically. Diane’s father died and her mother was unable to live on her own and, as they learned, did not have a lot of resources left after some poor investments and wasteful spending. They would now be providing for her mother in their home. And then they were asked by their daughter if she could move home with her two children since her husband decided he wanted to find himself, so he quit his job and told her he no longer wanted to be married to her and was not willing to provide any support voluntarily. Of course, Sam and Diane welcomed their daughter and grandchildren and are willing to pay for her lawyer and will provide support for them. But now they are concerned about their own financial state. They have heard of the so-called “sandwich generation” issues and find themselves unexpectedly in that situation. Sam and Diane could be well-served by a Safe Harbor project engagement and periodic check-ins, but may determine that they would prefer a longer-term, more comprehensive financial planning and implementation program with the Safe Harbor/Black Diamond team. Sam and Diane’s life altering situation shows the value of our collaborative planning process—and the importance of making appropriate “course corrections” over time.
Here are some additional client situations to help you determine if Safe Harbor is the right firm for your financial needs.
4
Mid-Career Couple Needing Help Dealing with Competing Financial Goals.
Jerry and Elaine find themselves in their high-earning years but without a lot to show for their labors. They live very comfortably and have never fully funded their workplace retirement plans. They are thinking about starting education plans for their two children who are 14 and 12 years old. They are looking at a possible substantial inheritance in the near-term and think they might like to buy a vacation home and/or sell their current home and move to a bigger place. Jerry and Elaine have finally realized they may benefit from some professional assistance. Due to their ages and where they are in their financial lives, Jerry and Elaine are not good candidates for Safe Harbor. Instead, they would be good candidates for a comprehensive financial plan provided by our resource partners at Black Diamond Financial Solutions.
5
Retired Widower Not Comfortable Dealing with Investments.
Mike was never the money person in their marriage. His late wife Carol had handled that, and so Mike was hit especially hard at Carol’s sudden death right after they both retired. After doing nothing for a while Mike saw an ad for a nationally known financial services provider (that hates annuities), and since he had a lot more than their advertised $500,000 minimum investment limit, he decided to sign up with them. A year or so later he talked to a friend who suggested Mike would be better served by a fee-only fiduciary who could help him with more than just his investments—and probably for a lot less money. Mike would be an ideal candidate for the Safe Harbor/Black Diamond team approach, where we can establish a baseline, make recommendations and then help Mike manage his investment portfolio at a much lower cost than he currently pays, coordinate and integrate his investments and taxes, and develop a tax-efficient retirement income (“TRIP”) plan for each year. Mike also wants to establish a legacy plan for his grandchildren but did not know how he should do that. Our ongoing service program clients also have the ability to coordinate their estate and legacy planning as well due to our strategic relationships with well qualified attorneys. A final goal of our comprehensive service program is to help our clients understand their personal financial situation and the things they can do to help themselves and their families. We take to heart the old Syms Clothing stores advertising tagline, “an educated consumer is our best customer.”
6
Thinking About Retirement and Troubled by Taxes.
Jay and Gloria are trying to decide what to do about retirement and went to a seminar put on by a “wealth advisor” who was trying to sell variable annuities as the be-all and end-all of retirement planning. Gloria’s friend suggested they talk to a fee-only fiduciary before they committed to anything. Jay’s main takeaway from the seminar was that taxes in retirement were going to be more complicated than they already were, and he wants to talk to someone who can help them with taxes too. Jay and Gloria are likely ideal clients for the Safe Harbor/Black Diamond team approach since they would benefit from our integrated and holistic approach to factoring tax planning into our service program. Further, while Black Diamond does have the ability to offer various financial products to clients, they are firm believers in being completely transparent to clients on all product recommendations. While we may recommend clients buy some annuities it will be very clearly for their benefit for a specific purpose and not simply to have Safe Harbor or Black Diamond to profit from that product purchase. Jay and Gloria’s experience in the seminar is pretty common. If a “financial advisor” or “wealth advisor” has only insurance-type products in his or her client toolbox you only get an insurance solution which may or may not be the best idea. The client service approach of the Safe Harbor/Black Diamond teams means we have a very complete toolbox available to benefit our clients.