How We Help You Plan

Bob - The Defined-Benefit Plan Dilemma (Case Study #1)

Bob faced a common question as he prepared to retire from a company that provided him with a defined-benefit pension plan: Would it be more advantageous for his financial future to elect a guaranteed income payout or a lump-sum payment? Further complicating his decision was the fact that he could elect to receive a guaranteed income in three different ways -- for his lifespan, for both his and his spouse’s lifespans, or for some other defined period of time.

When Bob came to Integrated Financial Management for advice, we started by analyzing historical market returns projected over his estimated life expectancy, taking into account his risk tolerance levels, to see what he might expect if he invested the proceeds from a lump-sum payment. We then compared those expected returns against the various “guarantee income” scenarios to determine which choice was most likely to serve Bob and his family’s best interests over the long term.

We didn’t stop there, however. Our next step was to evaluate alternative “guaranteed income” products to determine whether he could take the lump sum total and replicate his pension benefit in a more cost-effective manner.

Bob’s story illustrates one of our guiding principles: We will make a recommendation only after conducting a thorough analysis of the facts.

John – The 401(k) Shuffle (Case Study #2)

John took a job with a new employer, bringing to light a question that many employees with 401(k) plans face: Should he transfer the funds to the 401(k) plan of his new employer, or should he roll the funds into an individual retirement account (IRA)?

When John turned to Integrated Financial Management for advice, the first thing we told him was that he should consider a third option -- leaving his funds in the 401(k) plan of his former employer.

We explained to John that rolling 401(k) assets into an IRA could offer the advantage of allowing him to consolidate several asset pools into one IRA, offering him greater control over managing his investments and expanding his investment options. However, this option frequently increases investor expenses; an issue we comprehensively reviewed with John. 
In deciding whether to move the account to the new employer’s 401(k) plan, we compared the existing plan with the new company’s plan, looking at investment choices and analyzing which choice appeared most promising for John’s financial future.


The above is a hypothetical example provided for illustrative purposes only.