Case Study

• Business owners 
• Retirement plan
• Inherited IRA
• Wills/Guardianship
• Life insurance

Mark and Lisa are a married couple in their late 40s who own a growing digital marketing business with three employees. While raising two children (ages 10 and 13) and growing their business, they realized it was time to focus on long-term financial planning. Their goals are maximizing retirement savings, offering benefits to retain top talent, and protecting their children’s future.

1. Retirement Savings for Owners and Employees: Mark and Lisa wanted to contribute as much as possible toward their own retirement while offering employees a competitive benefit. They were looking for a plan that balanced generous contributions and ease of administration, without adding unnecessary costs or complexity. 
2. Estate Planning for Their Children's Future: With no wills or formal estate plan in place, Mark and Lisa were curious about what they needed to prepare for if something happened to them.  They needed a plan that named guardians, protected their kids’ inheritance, and ensured responsible management of their assets until the children reach adulthood. 
3. Inherited IRA: Mark recently inherited a $500,000 IRA, which must be fully distributed within 10 years and take RMDs under current tax law. Since withdrawals are considered taxable income, they were concerned about the potential tax impact, especially if taken all at once later. They wanted a plan to avoid taxes and use the money for retirement.  

1. Setting Up a SIMPLE IRA for the Business: After exploring retirement plan options, we recommended that Mark and Lisa set up a SIMPLE IRA (Savings Incentive Match Plan for Employees). It’s easy to administer and allows them and their employees to contribute. In 2025, they can contribute up to $16,500, with the business matching up to 3% of W2 compensation. This helps them save for retirement while offering a meaningful benefit to their team. 
2. Maximizing Personal Retirement Savings: We advised Mark and Lisa to contribute to Roth IRAs beyond the SIMPLE IRA. They’re eligible based on their income, and we plan to use funds from Mark’s inherited IRA to make annual Roth conversions over the next 10 years. This creates a mix of tax-deferred and tax-free savings, giving them more flexibility in retirement. Any additional savings will go into their joint taxable brokerage account. 
3. Inherited IRA: Mark inherited a $500,000 IRA, which must be fully distributed within 10 years. To avoid a large tax bill in year 10, we’ll coordinate with their CPA to make strategic withdrawals each year based on their business's profit and resulting tax bracket.
4. Estate Planning and Guardianship:  We referred Mark and Lisa to a local estate attorney to draft wills, name guardians for their children, and create trusts for minor beneficiaries. We also discussed setting up durable powers of attorney and healthcare directives to protect them in case of incapacity. 
5. Life Insurance Review: We reviewed their life insurance coverage as part of their financial plan. We calculated what-if scenarios for what they'd want to cover if something happened to either of them. They wanted to cover lost income until the youngest turned 18, pay off the mortgage, provide for their children’s education, and help the surviving spouse with some retirement savings. We were able to give them a truly unbiased insurance perspective (because we don't sell it). We found that they were both overinsured and recommended getting quotes to see if they could save money.
6. Financial Plan and Business Continuity: Using our planning software, we projected Mark and Lisa’s retirement savings and cash flow. If they stay the course, they’re on track for a successful retirement at age 62, potentially phasing out of the business around 57, depending on market returns. We also encouraged them to create a business succession plan.

1. Retirement Planning: Mark and Lisa now have a clear path to retirement. By establishing a SIMPLE IRA, they’re maximizing their annual contributions while offering a meaningful benefit to attract and retain employees. Their Roth IRA contributions and strategic inherited IRA withdrawals give them a balanced tax strategy with tax-deferred and tax-free retirement income sources.
2. Estate Planning: With updated wills, named guardians, and trusts in place, their children’s future is protected. Powers of attorney and healthcare directives ensure Mark and Lisa have coverage in case of incapacity, and their life insurance now fully aligns with their family’s financial needs.
3. Tax Efficiency: By coordinating inherited IRA withdrawals with their CPA, we’ve minimized their tax exposure and avoided the risk of a large tax bill in year 10. Roth conversions also help reduce future required minimum distributions (RMDs) and support long-term tax efficiency.
4. Business Continuity: Their financial plan projects a strong retirement outlook. With a succession plan is in the works, they now have a clear plan to protect the business and its employees should the unexpected happen.
5. Peace of Mind: Most importantly, Mark and Lisa feel confident about their financial future for their family and business.