Young Family with Full Plate
Accumulating Wealth
Primary goal: Prioritize savings, make sure family is legally and financially protected, and relocate to the suburbs.
The Background
Fred and Linda are professionals in their late 30s with two young daughters. They had outgrown their New York apartment and sought guidance on buying a home in the suburbs. Fred and Linda also wanted to be sure they were saving enough for their daughters’ college education while saving for their retirement. Both had small life insurance policies purchased in their late 20s but had not updated their wills since getting married.
The Challenges
- Fred and Linda were lifelong renters apprehensive about buying their first home and understanding the costs of home ownership. They had been saving for years, and this purchase would be their biggest joint purchase.
- They wanted to pay for their daughters’ college educations. They needed help understanding their cash flow as new homeowners and how to prioritize their savings and spending.
- Balancing work and family is challenging, and they had sidelined too many financial planning discussions since the girls were born. They wanted to ensure they had wills, guardians appointed for the girls, and adequate insurance to replace their income in the case of an early death/untimely passing.
How We Helped
Through our work, Fred and Linda identified ways to reduce their expenses to save more for retirement, education, and future maintenance costs for their new home. Their HTG advisors projected education expenses and recommended appropriate savings and investments that maximized tax benefits. In addition, HTG collaborated with their attorney and insurance agent to address their estate planning and insurance needs.
- Helped to understand the costs of home ownership, identified ample rainy day fund, and created a saving strategy for college and retirement.
- Provided referrals to several estate planning attorneys, prepared net worth statement and additional financial information for the attorney and ensured prompt execution of estate planning documents.
- Implemented the attorney’s recommendations for changes to beneficiaries and account titling.
- Analyzed life insurance needs, introduced them to an independent insurance broker, and worked with the broker to obtain low-cost term policies.
- Estimated the cost of college for their daughters, set up 529 plans for education savings, and created a strategy for saving early and often for college without sacrificing their retirement savings.
- Monitored and updated their education and retirement savings strategy based on changes to income and education priorities.
