Owners & Entrepreneurs

Business owners and entrepreneurs must navigate many tough decisions that vary from someone working at a much larger entity. For these individuals, often a large majority of their future wealth is dependent on the success of the business. As a result, we often help these clients in critical areas such as customized tax planning, retirement savings decisions, and business succession planning.

Case Study:

James was the majority owner of a private logistics consulting company of which he had planned to sell his stake before the end of the year due to pending tax law changes. Once it was known that tax laws would not change, he decided to pause and instead harvest cash flow and delay the sale for a year or two. With a potential retirement in the next 2 – 3 years, he started to think about his income and distribution needs once he’d decided to make work optional. Between various retirement accounts, equity ownership in his company, and personal savings – he wasn’t quite sure if his business sale would be enough to meet retirement income as well as when and where to draw income from.

Details

Roughly $2.4 million in retirement assets
Holds approximately $500,000 in after-tax investments
Business equity worth between $1.5 million – $3 million
Has long-term care rider via $300,000 annuity contract

Goals

Create sustainable lifetime income Minimize tax implications
Diversify asset allocation beyond traditional stocks & bonds
Invest $750,000 of sale proceeds into private real estate business

Advanced Planning Needs

Business exit planning
Tax planning
Retirement income analysis
Alternative investment strategies

The Solution:

After initiating a relationship with CAM, market conditions changed, which allowed James to push up his business sale timeline. The market condition also allowed him to pivot into his newly launched real estate business. During several months of exit planning negotiations, CAM worked closely with James to help analyze multiple planning scenarios. This included several “what if” buy/sell transactions with different payout terms, amounts and tax rate assumptions. Once a sale figure was reached, CAM needed to assess how to reinvest the sales proceeds to achieve future portfolio growth and sustain retirement income that would begin soon. Due to James’ risk averse nature to stocks and rising interest rates which, could hurt traditional bonds, CAM sought to complement James’ traditional stock and bond holdings with alternative investment strategies in order to reduce portfolio volatility. CAM assisted in implementing this strategy while also increasing investment income from his investment holdings.

These are fictional client pictures and profiles that provide case studies that represent unique individual situations and outcomes that have been presented to CAM. Examples are for illustrative purposes only and may not necessarily be replicated.