Action Steps:

George and Michelle

Step 1

Our focus with George and Michelle was creating a financial plan showing what it would look like to retire at 62 with and without owning a second property in Arizona. Our initial plan for them both retiring at 62 showed an 86% probability of success of retiring early, but a 72% probability of success if they bought a second property.

Step 2

We like to see clients in what we call the confidence zone which is 75-90% probability in most cases, so we discussed their budget and their ability to save more for the next 7 years to achieve their goal of having a second property to spend their winters. We gave the client an idea how much more they would have to save to achieve their two most important goals—Retiring early and having a second property.

Step 3

Since George and Michelle were in their early 50’s, we discussed their risk tolerance and created an investment portfolio to match their risk and stage of life. We determined that to reach their goal of retiring early and owning a second property, a 70/30 mix of investments would give them the best outcome of risk and return, but would be revisited each year as they approached retirement.

Step 4

We built a low-cost diversified portfolio with 70% exposure to equities and 30% exposure to fixed income with plans to rebalance as needed. We then created a taxable investment account to start investing $2000/ month to help reach their two most important goals and to increase their probability of success from 72% to 84%.