Case Study: Ryan & June

Ryan and June were referred to the Capstone Team by a Capstone client. Ryan is a manager of a local refinery and June is busy working at home. They would describe the values that shape their life decisions as: Strong work ethic, Analytical, Conservative, High standards.

Their personal goals included retirement in the next six months with a plan for tax efficient income for their future. Ryan and June both enjoy being parents and want an estate plan for the amount that may be left for their children.

The Client-Centered Consultive Process™

Discovery Meeting

  • Ryan and June met with their Capstone Advisor, filled out necessary forms for securing appropriate information and discussed their assets that included pension plan distribution options: lump sum or annuity; 401(k) values, and allocation.
  • Ryan and June showed their investments to be $1.8 million at retirement.
  • Together with Advisor, they looked at stock values of employer and cost basis.
  • They also reviewed the current estate documents and the past two years of tax returns.
  • Ryan and June complete risk assessment with the help of their Advisor and determine net of income tax cash flow needs through retirement.

Investment Plan Meeting

  • The Capstone Advisor created cash flow models and identified tax saving opportunities imbedded in corporate stock purchased in 401(k).
  • Ryan and June saw cash flow models that reflected tax options and available income and asset appreciation trend lines.
  • They discussed consideration of Social Security distribution at age 62 or waiting until age 66.
  • The Advisor back tested cash flow model for historical performance of recommended allocation.

Mutual Commitment Meeting

  • Advisor, Ryan and June established a mutual understanding of commitment and decided to move forward together.
  • Ryan and June signed necessary forms to establish the relationship with Capstone Wealth Management.

Implementation of Plan

  • Ryan, June and Advisor met with accountant and established plan to minimize income tax through capture of capital gains in 401(k) corporate stock using net unrealized appreciation.
  • Ryan, June and Advisor met with insurance agent and confirmed adequacy of liability coverage on recreation vehicles and home.
  • Ryan, June and Advisor interviewed attorney and drafted and updated wills. This included living wills, durable power of attorney for health care and financial needs.
  • Together they created a final, customized cash flow model that reflected their personal goals. This included a back tested portfolio that achieves optimal income with acceptable risk tolerance that works for Ryan and June.
  • Together, Ryan, June and Advisor created a tax efficient income.

Reporting of Plan

  • Ryan and June talk with Advisor at regular meetings to review investment plan performance.
  • Ryan and June call Advisor with any questions and concerns.
  • Ryan and June have subsequent meetings to discuss recommended modifications.
  • Together with Advisor they make some changes to rebalance the plan and reduce volatility.
  • At the next meeting they monitor the plan’s performance to the cash flow benchmark.
  • Advisor, Ryan and June initiate the custom Capstone Family Legacy Workbook process.