Shannon and Michael McClelland

(Names And Information Changed For Confidentiality)

Their Personal Circumstances and Goals

Michael and Shannon McClellan are both 40 with two small children. David works for a government contractor. Shannon just left teaching to pursue a career as a REALTOR®. They have a healthy cash flow, but need help organizing and optimizing their finances. They want to utilize her business to benefit them personally, but have a lot of competing priorities:

  • Pay off their student loans in an efficient manner
  • Buy their dream home on the water
  • Retire or become “work-optional” around 55 as opposed to the traditional 67
  • Save for their children’s futures including private k-12 schooling and college
  • Learn how to most optimally fund their retirement.
  • Lastly they want to learn how to optimize their taxes now that Shannon has to pay them on her own

They decided to hire a financial planner to help them define these goals and develop a plan of action to cover their entire financial life, not just their investments.

The Work We Did Together

Together we were able to make the following changes:

  • Used the student loan simulator tool to get clarity on which payment plan would pay off their debt the fastest at the lowest cost and set up automated payments.
  • Front-loaded their children’s education with appropriate 529 investments to be able to use up to $10k per year per child in private k-12 expenses, save for their undergraduate education, and provide them a state income tax break on the contributions.
  • Reviewed Michael’s employer insurance, including life and disability. Analyzed what they would need if either or both were to pass away,and supplemented their need by purchasing affordable term life insurance.
  • Set up a formal estate plan, including a revocable living trust, will, advanced medical directives, and powers of attorney, so their family would be protected in the event of premature death or disability.
  • Set up an LLC for Shannon along with corresponding business bank accounts. Created a system for setting aside money for taxes, operations, profit, and compensation so she can run her real estate business efficiently.
  • Established a SEP IRA through Shannon’s business for her to save more money for retirement than she otherwise could inside of a regular IRA and make it a business tax deduction.
  • Set up a taxable investment account. Through strategically choosing their investments and saving a certain amount every month they will be able to purchase their dream home on the water in 5 years.
  • Set up a separate high-interest savings account to save into each month, that they can use to travel and build memories as a family.

Michael and Shannon now enjoy their time and breathe easy because they know they have the systems in place to achieve their goals.