Navigating pension contracts can often be complex. Because we work closely with many public-school administrators and teachers, we typically will know the details of the provisions and options of these retirement plans.
Sixty-five-year-old John Loughlin, a high school teacher, and Kelly Loughlin, an assistant principal, are retiring at the end of the school year. Both have always contributed to their retirement plans—other than the 12 years Kelly took off to stay at home and raise their children. John and Kelly are looking to better understand their financial picture in retirement.
|What paperwork do we need to complete with the state and my school district?
|We are familiar with the paperwork needed in your state and school district. We will work alongside you to collect all necessary paperwork and make sure all forms are completed and submitted according to contract deadlines.
|How do we ensure that the pension option we choose will protect us and our family?
|We review your pension options and recommend the most appropriate choice for you, your spouse and family. We will discuss each option and answer any of your questions before finalizing your pension option.
|When should we claim Social Security?
|We perform a Social Security analysis and help you determine the best claiming strategy.
|How does our school district’s retirement incentive work and how do we figure out what we will receive?
|We will examine your district’s contract and review how it applies to your situation. We help determine your future income based on your years of service, unused sick time, etc.
|What is the penalty if John retires early?
|We request specific early retirement estimates from the state and analyze the amount of the reduced benefit.
|What are the healthcare options for my family?
|After we conduct a review, based on your age, company benefits, Medicare options, private insurance options and family situation, we evaluate healthcare alternatives and income requirements so we can help you make an informed decision.
|How do I make sure Kelly is taken care of if I die?
|We work with Kelly to apply for spousal benefits and help to ensure your investments and pensions are set to provide for her. We also coordinate with your attorney to make sure critical estate plans and beneficiary designations are up to date.
|What are my options for unused sick leave?
|By examining your school district contract, we can help you choose the best option for unused sick days including taking a cash payout, applying it to healthcare or rolling it into a tax-deferred investment account.
|When can we retire and begin to draw down our benefits?
|We take a complete inventory of your investments, pension options, Social Security and healthcare options and create specific recommendations based on your age and income requirements.
IMPORTANT: The projections or other information generated by Envision regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.
Envision® methodology: Based on accepted statistical methods, the Envision tool uses a simulation model to test your Ideal, Acceptable and Recommended Investment Plans. The simulation model uses assumptions about inflation, financial market returns and the relationships among these variables. These assumptions were derived from analysis of historical data. Using Monte Carlo simulation, the Envision tool simulates 1,000 different potential outcomes over a lifetime of investing varying historical risk, return, and correlation amongst the assets. Some of these scenarios will assume strong financial market returns, similar to the best periods of history for investors. Others will be similar to the worst periods in investing history. Most scenarios will fall somewhere in between. Elements of the Envision presentations and simulation results are under license from Wealthcare Capital Management LLC. © 2003-2021 Wealthcare Capital Management LLC. © 2003-2021 Wealthcare Capital Management LLC. All Rights Reserved. Wealthcare Capital Management LLC is a separate entity and is not directly affiliated with Wells Fargo Advisors.
*This case study is hypothetical and for discussion purposes only. It is not intended to represent any specific return, yield or investment. Individual experiences referenced above may not reflect the future experience of any one client. The planning process discussed may not be suitable for your personal situation, even if it is similar to the example presented. Past performance is no guarantee of future results. Investing involves risk including the possible loss of principal.
Wells Fargo Advisors is not legal or tax advisor. You should a consult with your attorney, accountant and/or estate planner before taking any action.
Insurance products are offered through nonbank insurance agency affiliates of Wells Fargo & Company and are underwritten by unaffiliated insurance companies.