Case Studies
Case Study #1
Dr. Sarah (48) – VP at a Pharmaceutical Company
Background
Dr. Sarah Johnson, 48, is a Vice President of Clinical Development at a leading biotech firm. With over 20 years in the industry, she’s navigated her way to a high-powered position, balancing career ambitions with family responsibilities. Sarah came to us with concerns about optimizing her complex compensation package and ensuring long-term financial security.
Challenges:
- Equity Compensation: A significant portion of Sarah’s compensation was in stock options and RSUs, which she was unsure how to manage effectively.
- Retirement Planning: Despite a high income, Sarah worried about having enough saved for a comfortable retirement, especially considering potential career changes.
- Work-Life Balance: As a mother of two teenagers, Sarah wanted to make sure she could fund their college education without compromising her own retirement.
- Tax Efficiency: Her high income bracket meant Sarah needed strategies to minimize her tax burden.
- Philanthropy: Sarah was passionate about supporting STEM education for girls but wasn’t sure how to incorporate this into her financial plan.
Our Approach:
- Comprehensive Compensation Analysis: We conducted a thorough review of Sarah’s compensation package, including base salary, bonuses, and equity components. We developed a strategy to optimize her stock options and RSUs, considering vesting schedules and market conditions.
- Retirement Projection and Planning: Using sophisticated modeling tools, we projected Sarah’s retirement needs, factoring in her desired lifestyle and potential longevity. We maximized her contributions to her 401(k) and recommended a backdoor Roth IRA strategy to boost her tax-advantaged savings.
- Education Funding Strategy: We established 529 plans for her children’s education, balancing this with her retirement savings goals. We also explored potential merit-based scholarships and tax-efficient gifting strategies from grandparents.
- Tax-Efficient Investment Approach: We implemented a tax-aware investment strategy, utilizing municipal bonds in her taxable accounts and employing tax-loss harvesting to offset gains. We also recommended a donor-advised fund to manage her charitable giving tax-efficiently.
- Philanthropic Planning: We helped Sarah establish a giving strategy that aligned with her passion for STEM education. This included setting up a donor-advised fund and exploring board positions with relevant non-profits, which also aided her professional network.
- Risk Management: We reviewed Sarah’s insurance coverage, recommending adjustments to her life and disability insurance to ensure her family’s financial security. We also discussed the potential benefits of long-term care insurance.
Results:
Over the course of two years working with Align Financial Solutions, Sarah achieved several key milestones:
- Optimized her equity compensation, resulting in a 22% increase in her net worth
- Increased her retirement savings rate from 12% to 20% of her income
- Established fully-funded 529 plans for both children
- Reduced her annual tax liability by $32,000 through strategic planning
- Established a donor-advised fund with an initial contribution of $100,000 for her philanthropic goals
Sarah now feels confident in her financial future, knowing she has a comprehensive plan that aligns with both her career ambitions and personal values. She has the peace of mind that she’s on track for a secure retirement while also making a significant impact in her field and community.
This case study demonstrates our holistic approach to financial planning for Gen X women in pharma leadership roles, addressing the complex interplay of high-stakes career decisions, family responsibilities, and personal aspirations.
Case Study #2
Laura (62) – An Executive Woman Wanting To Retire in 3 Years
Her Situation
She reached out to us when her company was undergoing restructuring, feeling nervous and uncertain about the financial implications of potentially retiring early from her corporate job. She has been saving diligently, maxing out her 401k and HSA account and having enough money in her savings account.
However, Laura had these questions she wanted to address so that she felt more confident about her financial future.
- Am I doing the right things with my money?
- Do I have too much in cash? What should I do with the extra cash I have?
- Am I taking the right opportunities so that money is working for me?
- Am I on track for a sufficient amount in my retirement account if I don’t have any income in 3 years? Once I retire, where should I start taking my income from?
- Am I paying too much in taxes?
- When should I liquidate my company stocks?
She wanted to make sure she makes the right decisions for her retirement so that she could comfortably do what she wants when she wants. She didn’t want to make any mistakes that could jeopardize her overall financial picture in retirement.
How We Helped Laura
- Organized her finances and consolidated all of her investment accounts so that she is in control of her money and can easily access everything in one place.
- Took advantage of partial Roth conversions to maximize her long-term retirement savings after taxes.
- Optimized her portfolio by implementing a customized investment strategy aligned with her goals and values.
- Answered all of the questions she had to empower her to make informed financial decisions through a comprehensive financial plan.
She gained a clear understanding of her retirement outlook and how much she could afford if she stopped working in 3 years. She was able to monitor real-time data in one place through our financial planning software. We helped her with a customized tax planning and investment strategy aligned with her needs and values so that her money was working cohesively toward her goals.
**The above are hypothetical situations based on real-life examples. Names and circumstances have been changed.
Case Study #3
Janice (74) – Helping her make a bigger impact while feeling confident about her financial future
Her Situation
Janice, a 74-year-old widow, was feeling uncertain and skeptical about her financial future. After years of frustration with financial advisors and products pushed by her late husband’s colleagues, she was left with speculative investments that didn’t match her conservative approach. She was nervous about her finances after her husband’s passing and wanted a more stable plan that aligned with her values. Her main goal was to live comfortably while also giving to her favorite charities in a tax-efficient way.
What She Needed
Janice needed a financial strategy that aligned with her more conservative risk tolerance and provided a clear path to charitable giving. She was looking for a plan that would support her lifestyle while maximizing the impact of her charitable contributions. Above all, she wanted to feel confident, knowing her money was working for her in the right way.
How We Helped
We started by truly listening to Janice, understanding her frustrations, and prioritizing her comfort in every financial decision. To meet her goals, we developed a strategy centered around Qualified Charitable Distributions (QCDs), enabling her to make tax-efficient donations directly from her IRA, leveraging her age and the tax benefits that come with it. We also separated her investment strategy into two distinct parts: one for her personal income needs and another for her charitable giving. This approach allowed her to minimize risk while ensuring she maintained a steady and reliable income stream.
When it came to estate planning, we helped Janice identify the charities she wanted to support. We ensured her estate plan clearly outlined these organizations and structured it to maximize her charitable impact while minimizing taxes.
The Outcome
Janice now feels much more at ease with her financial future. She has a clear and conservative investment strategy that supports her day-to-day living expenses, and her charitable giving is optimized for tax efficiency. With the QCDs in place and her estate plan clearly aligned with her wishes, she’s confident that her legacy will continue to make a meaningful impact on the causes she cares about most. She now feels supported, heard, and empowered in her financial decisions.
**The above are hypothetical situations based on real-life examples. Names and circumstances have been changed.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Securities and advisory services offered through LPL Financial, A Registered Investment Advisor. Member FINRA/SIPC.
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