Bill and Mary Smith
Bill and Mary have plenty of RRSP and Cash investments. However, after further analysis, they are unable to fully fund their retirement goal through liquid assets. Real estate may be the solution.
The Full Report is up to 16 pages long and takes a formal approach to delivering the client analysis. Included are several boiler-plate documents, chart documents, an alternative investment Strategy, and client-friendly ledger documents.
The Completed Analysis
From the analysis we can see that Bill and Mary will have insufficient liquid assets to fund their retirement needs. However, they have several options available to them; reduce lifestyle, work longer, earn more return, or save more money. In addition, they also have a recreational property worth $200,000 that could be used to fill any income deficiencies. Based on the discussion we have, we will be able to determine the best possible approach for these clients.
View the summary below for further details.
Report Summary and Focus
This case was built using The Razor version 2.7.41; current results may vary.
As we can see from the Lifestyle Chart, Bill and Mary fall short of their needs by age 80. This indicates that there are less than sufficient liquid assets than required to fully fund retirement. As we are planning to age 92, there are a total of 13 years of deficiencies.
When deficiencies arise, The Razor will automatically borrow from the Lifestyle Line of Credit (LOC) to make up the difference. This will track the value of the deficiency as well as offset the clients’ fixed assets with their LOC debt. This gives us the ability to see whether they have sufficient total assets to fund their goal.
In this case, Bill and Mary still have approximately $1.2 million, even after 13 years of deficiencies, suggesting a possible liquidation of fixed assets could fill the deficiencies. As the clients have both a Recreational Property and a Principal Residence, they should be able to fund their deficiency through downsizing or a reverse mortgage provided they are willing to do so.
Liquidating fixed assets isn’t the only option available to Bill and Mary; there are many other directions they could choose to take. The Retirement Analysis report will automatically modify itself according to this client type and situation. There are four primary options that can assist Bill and Mary in funding their goals; reduce lifestyle, work longer, earn more return, or liquidate fixed assets.
The end result will likely be a combination of one or more of these options. What they choose and the recommendations made will be dependent on the clients’ attitude and the direction you want to take them. This document helps create the discussion needed to come to a conclusion.
Alternative Investment Strategy
This report was designed to bridge the discussion between insurance needs and investment strategies involving life insurance. There are 9 different strategies to choose from. This document can be selected by the user prior to printing, or removed entirely.