The following three scenarios highlight actual Olympic clients and a variety of beneficial planning solutions they’ve received from our firm. For privacy and confidentiality reasons, photographs shown are not of the actual clients.
Boeing Success Stories
Client Profile
- Married couple, early/mid 60s
- Both retired Boeing managers
- Invested net worth (not counting home equity) $3.9 million
- Took their Boeing pensions in a single lump sum
These clients were initially referred to Olympic in 2013. Soon afterward they both attended a Boeing retirement seminar presented by Eric.
After nearly two years of recommendations and related discussions — and upon reaching age 59.5 — the husband decided to ‘roll over’ his Boeing 401(k) balance to a Rollover IRA account through Olympic at Charles Schwab. At Boeing, this is known as the ‘Age 59.5 Withdrawal’ provision in the 401(k). It allows active Boeing employees aged 59.5 and older to roll money out of the 401(k) on a tax-deferred basis while maintaining their eligibility to continue contributing and receiving employer matching contributions.
The husband later accepted a VLO in Summer 2015, and elected to claim his Boeing Pension (PVP) in a single lump-sum payment a few months later.
The wife retired in early 2018. She also elected to receive her Boeing pension benefit in a lump sum. However, her pathway was a bit different. She first requested that the pension lump sum be deposited to her Boeing 401(k) account. Once that transaction was completed, she then rolled over the resulting balance (Boeing 401(k) plus pension lump sum) to a Rollover IRA through Olympic at Schwab–exactly as her husband had done the year before.
Both husband and wife based their decisions to claim their pension benefit in a lump sum on retirement planning scenarios modeled for them using MoneyGuide. In particular, side-by-side scenarios were created which compared taking the pension benefit in a lump sum vs. monthly payments.
From the beginning, Eric has prepared extensive investment plan recommendations and retirement income scenarios for this client. There have also been many review meetings and phone conversations centered around preparing them for a successful, worry-free retirement.
One of their most desired retirement goals was relocating to a warmer, sunnier climate. In early 2019 they chose the Phoenix area and purchased a gorgeous home in a golf community where they’re now enjoying the retired life they’ve always dreamed of.
Client Profile
- Married couple, early/mid 50s
- Both Boeing executives — wife still with the company, husband retired
- Invested net worth (not counting home equity) $3.7 million
- Husband started and is now running a successful business
In Fall of 2013 these clients decided to become clients of Olympic. While both are successful and financially astute, they recognized the need to involve a professional to assist with the development of their investment and retirement plans.
One of the first investment planning objectives was to begin reducing their substantial exposure to Boeing common stock (shares they held outright and options they had been granted.) This was achieved through a systematic annual plan to help mitigate tax consequences. The proceeds from the stock sales and options exercises were subsequently diversified into a professionally-managed model portfolio of individual stocks and bonds.
Once the strategy for diversifying out of Boeing stock/options had been implemented, the next step was to align/coordinate the investment mix in each of their Boeing 401(k) accounts with the portfolio composition in their Olympic investment plan. At that point a decision was also made to begin making their ongoing 401(k) contributions on a Roth after-tax basis. While this adds to their taxable income in the near term, it delivers a greater long-range benefit of improved tax diversification in their overall investment plan.
Another recommendation was to begin using Boeing’s deferred compensation program to facilitate the exercise of Boeing stock options (a taxable event.) In a nutshell, compensation is deferred to offset the ordinary taxable income realized when options are exercised. This strategy makes exercising non-qualified options more tax efficient and also establishes a future income stream from the compensation deferred.
Tax efficiency/control is an important financial priority for this client. Each year, proactive measures are taken to conduct ‘loss harvesting’ in their taxable (non-retirement) investment account. This intentional effort helps reduce exposure to both long-term capital gain taxes as well as ordinary income tax liability caused by realized short-term capital gains. Tax management is an important and valuable service offered to all clients of Olympic where appropriate.
Also as part of their investment plan, this client opened a 529 college savings account through Olympic for their young daughter and have since been funding it for her future higher education. (Shares in the 529 plan investments recommended by Olympic can be purchased by clients only commission-free.)
Finally, in 2017 the husband retired from Boeing, and in 2018 the couple opened a new business which is now established and successful. This lifelong dream of becoming a business owner has been fulfilled, due in part to their planning partnership with Olympic Wealth Management.
Client Profile
- Married couple, mid/late 50s
- Husband: Boeing vice president, Wife: Engineer
- Invested net worth (not counting home equity) $4 million
This couple was referred to Olympic in Fall 2017. As a Boeing vice president, the husband has access to a robust suite of retirement benefits with the company. His wife, an engineer by training, is an astute investor with a high degree of financial acumen.
Initial consultations at that time revealed they owned approx. $2 million of investable assets — $900,000 of which was in low-yielding cash. Another $400,000 was held in an IRA annuity, where the costs of ownership were prohibitive. (This annuity was later surrendered and the proceeds invested in a Rollover IRA which reduced overall costs and expanded the range of investment opportunity.)
There had also been a period where the husband engaged in day trading. That experience led to the realization he had neither the time nor the expertise to justify continuing that activity.
Additionally, a number of years prior to discovering Olympic the couple was advised to invest hundreds of thousands of dollars in mutual funds in a taxable (non-retirement) account. When held in taxable accounts, larger quantities of mutual funds can add significantly to a person’s capital gain tax exposure.
This was an issue that, despite their financial acumen, the client was unaware of. The problem was remedied by strategically exiting the mutual funds and replacing them with a professionally-managed portfolio of individual securities. The new portfolio through Olympic now provides a broader spectrum of investment types and management expertise, along with improved tax control.
Among their key questions related to retirement were the following:
- How much is enough to have in savings before leaving employment?
- How much can I safely spend each month or year?
- Which of my investments will be best to draw from, and in which order?
As with dozens of other Olympic clients, MoneyGuide® was–and continues to be–the ideal solution for modeling answers to these vital questions.