BROKER-DEALER | ESTATE PLANNING | HOW I SOLVED IT | INSURANCE | INVESTING | REAL ESTATE | RETIREMENT | TAX PLANNING

This couple had just days to make decisions that would alter the rest of their lives . By Karen DeMasters

Editor ’ s Note : This article is part of the Financial Advisor series “ How I Solved It .” Advisors describe a client with a problem and what they did to help .

It might sound odd , but this happened last spring to a South Michigan couple in their 50s , when their company , a Big Three automaker , went through a restructuring plan and as a result offered a group of senior employees , including the couple , an early buyout plan .

The two had both been working at the company since their late teens , their entire adult lives , maxing out their 401 ( k ) plans and preparing to retire at age 65 like everyone else . But they ’ d done minimal planning and now had only a matter of days to decide on the course they would take for the next several years . That meant making an overwhelming number of life-changing decisions ( like whether to keep working ).

With no idea what to do , they turned to Adam Blocki , an advisor at Schechter Wealth in Birmingham , Mich ., after getting a personal recommendation . Blocki set out to determine whether they could retire and how they would fund it — and most important , he tried to figure out how to make them feel comfortable and happy with their choices .

The couple had a healthy savings of $ 4.5 million in their 401 ( k ) plans , so they were well situated financially . The funds were invested in equity index funds , with a small amount in “ very vanilla bond funds ,” Blocki says . But they had made no adjustments to switch some of the portfolio from equities to bonds as they aged ; they held 95 % of the portfolio in stocks .

As part of the retirement package , they each were offered one year ’ s full salary , and they each had defined benefit pension plans through the automaker valued at $ 475,000 and $ 250,000 . The pension plans included health insurance at a discount rate .

“ I was a little surprised that they were questioning wheth- er they could retire because of the savings and pensions that they had amassed ,” Blocki says . “ But one of the main things I needed to do was make them comfortable with what seemed to them to be an overwhelming situation . We eventually had to diversify their 401 ( k ) holdings , and I wanted them to introduce some alternatives into their portfolios using their defined benefit pension funds . Education became a major part of the twoweek process .”

He met with the couple three times over the two weeks . Spoiler alert : Even though they are now happily retired , they had to make some big changes to get to this point . And they had to make some adjustments along the way .

26 | FINANCIAL ADVISOR MAGAZINE | MARCH 2024 WWW . FA-MAG . COM