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Sally and John

Sally and John retired with $10 million in assets from their work in technology. They need these assets to sustain them for the rest of their lives.

Our Service: Our primary focus is on reducing investment risks. A secondary focus is to reduce income taxes. We don’t emphasize the reduction of federal estate taxes because Sally and John are under the current estate tax limit of $23.2 million in 2020. We coordinate Sally and John’s income from a variety of sources:

  • Social Security
  • Pension
  • Required Minimum Distributions (RMDs) from IRAs
  • Inherited IRA
  • Roth IRA, if prudent
  • Additional cash (as needed) from taxable accounts

And for the cash that is needed from the taxable accounts, we look to dividends and liquidation of holdings with a low level of capital gains.  

The Impact: Sally and John receive a steady income for their retirement needs that is managed with the goal of reducing income taxes.  In addition, assets remaining in their taxable portfolio will become an inheritance for their adult children, with a step-up in cost basis (at each death). This step-up eliminates all unrealized taxable gains so that the assets can now be sold by their children without any capital gains tax due!

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