Case Studies

​Below are some examples of work we have done with other clients.

What a difference a Plan Makes

  • Ivy, age 48, was heartbroken when she was served divorce papers.  As a mother of two, ages 13 and 10, she was not familiar with the family finances and felt overwhelmed.
  • It was important to Ivy to maintain her lifestyle and stay in her home.
  • Our first step was to determine her available cash inflows, expenses, and investments to understand where she stood.

Current Base Scenario

Our first plan draft projected her current income, expenses and investments far into the future. Her investment projections indicated that Ivy could deplete her investments by the year 2050 when Ivy is age 77.
The Chart below shows the projected value of her investments.  

Scenario One

  • Ivy’s assets were limited to the equity in her home that was not accessible and her IRA that was subject to a 10% early withdrawal penalty and ordinary income tax.
  • One of Ivy’s highest priorities was to stay in her home
  • Her husband agreed to refinance the mortgage with lower interest rates and a lump sum cash out prior to the divorce, as Ivy would not qualify to refinance after the divorce.
  • We used the lump sum to eliminate her high interest debt payments, reduce her monthly outflows, and consequently eliminated the initial need to withdraw from her IRA and the associated taxes and penalties.
  • This alone extended her investments to age 92 as projected below.

Scenario Two

  • Financial planning is about trade-offs.
  • Ivy wanted to stay in her home for her lifetime and was willing to work full-time to do so.
  • We added college tuition to her plan and determined that she needed additional income of $10,000 annually for her plan to achieve a high probability of success.

What a difference a plan makes – Ivy went from initially depleting her assets at her age 70 to having over $1 Million at the end of her lifetime without investing one more dollar.

When it comes to your financial well-being, we do not take short-cuts.  There are many variables and moving pieces to take into consideration. Typically, we devote 20 to 40 hours to develop your initial plan. Does your current adviser care enough to take the time needed to build your lifelong plan?

There is never a time when financial advice is needed more than after the loss of a spouse

  • Ruth, a recent widow at age 64, had already decided to retire prior to her husband’s sudden death.  
  • She planned to take her social security immediately and take her pension as an annuity rather than a lump sum.
  • Like many widows, her only assets included the equity in her home and her IRA.
By projecting out her income, investments and expenses, we determined Ruth would likely deplete her assets by the year 2041 at her age 86.

Current Base Scenario

Brown and Freeman's Recommendation:

  • Ruth takes a lump sum payout rather than the fixed pension that would lose to inflation over time.
  • Rather than take her own social security benefit, she takes her husband’s social security survivor benefit at her full-retirement age of 66.
  • Ruth defers her own social security to age 70.  By doing so, her annual benefit increased by more than 52% over her age 64 benefit.  Over her lifetime, that is a significant difference in her wealth as projected below.

What a difference a plan makes

Ruth went from potentially depleting her assets at her age 86 to potentially having over $250,000 in investments at her life expectancy without investing one more dollar.

Through the financial planning process, we reviewed many different scenarios to determine Ruth’s best course of action that met her needs and desires while maximizing her wealth. Typically, we review five to six different scenarios and devote 20 to 40 hours to develop a plan. Your financial well-being is important to us and we will never take short-cuts. Does your financial adviser care enough to spend the time needed to build your plan?

When can I retire?

William is age 52, divorced and in a stressful work situation.

Our Objectives:
  • To determine what age William can comfortably to retire and enjoy life.
  • Apply the age 55 Rule that allows him to avoid 10% early withdrawal penalties from his 401k.
  • Determine ways to maximize his wealth and reduce his taxes.
William was relieved to know that he could comfortably retire as early as tomorrow.

Can Roth conversions increase my wealth?

  • Most of William’s investments are in Fully Taxable retirement accounts.
  • William’s tax bracket in his initial retirement years is low, presenting a window of opportunity to move (convert) portions of his taxable retirement investments to a tax-free Roth IRA. Converted amounts are taxable in the year of conversion but once inside the Roth IRA, converted amounts appreciate tax-free and any withdrawals are tax-free.
  • The Roth IRA is available as a tax-free resource for large purchases, unforeseen emergencies, and long-term care. This eliminates the need to withdraw from his fully taxable IRA that would push him into a higher tax bracket.
  • Tax-free ROTH IRAs are also inherited tax-free

Projected value of investments before Roth conversions

Projected value of investments after Roth conversions

Roth conversions increased William’s lifetime wealth by over $600,000 without investing one more dollar.

Financial planning is a process of analyzing many different scenarios to determine the one that best meets your needs and maximizes your wealth. Typically, we devote 20 to 40 hours to develop your plan and analyze all the scenarios that take into consideration all your puzzle pieces. Does your current adviser devote the time necessary to maximize your wealth?