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Jen and James Johnston
rev May 2024
Latest Meeting Recap
Latest Meeting Recap
We discussed progress toward your home purchase goal, 2024 tax planning, and strategies to improve financial communication when we met on May 1, 2024.
Your Action Items:
Provide a copy of your 2023 tax return and copies of recent paystubs (Jen and James)
Implement the Monthly Money Meeting review structure over the next few months - see below
Bill's Action Items:
Complete initial 2024 tax projection
Review investment accounts for rebalancing and tax loss harvesting opportunities.
Need Help?
Need Help?
We are due to meet in September 2024. You can schedule using the calendar below.
Have a question or an update between meetings? Email bill@pacesetterplanning.com
Core Values
Core Values
Financial security - never want to worry about money.
Planting your roots as a family in a place that feels like home.
Using finances to prioritize time and experiences with family and friends.
Live comfortably, balancing today's needs with tomorrow's goals.
Accomplishments
Accomplishments
Implemented a new bank account structure to make it easier for you to save money.
Goals accomplished: paid off $23,000 of student loan debt, purchased a used car.
Net worth increase of $51,000 over the past six months.
Increased retirement savings to 10% of your combined income.
Priorities
Priorities
Agreeing on and implementing a savings plan (budget) and bank account structure that respects each of your individual perspectives and values.
Buy a $800,000 home with 20% down in the greater Washington, DC area in two years.
Longer-term: be able to retire comfortably in your early sixties.
Implement a strategy to handle Jen's stock compensation.
Financial Snapshot
Financial Snapshot
NET WORTH
NET WORTH
$224k
ANNUAL INCOME
ANNUAL INCOME
$238k
excluding RSUs
RETIREMENT
RETIREMENT
$23,800
per year
MONTHLY SAVINGS
MONTHLY SAVINGS
$1,525
per month (excludes RSUs)
Account Structure and Transfers
Account Structure and Transfers
2024 Cashflow Projection
2024 Cashflow Projection
Savings
Savings
Planned Savings = combined 401(k) contributions
Net cash flow saved = everything that isn't spent
This includes your $1,525 per month savings target, plus your RSUs
Expenses
Expenses
Joint monthly expenses: $3,880 per month plus $2,100 per month in rent
Annual combined gifts and travel budget: $9,000
Monthly personal spending: $1,450 for Jen, $1,100 for James
"Other Expenses" are paystub deductions (health insurance, etc.)
Taxes
Taxes
These numbers are estimates. Formal 2024 tax projections and withholding recommendations will be provided separately.
Retirement
Retirement
Your retirement plan is in good shape; increasing your retirement savings to 10% of your paychecks and changing the investment allocation in your retirement accounts has significantly improved your retirement trajectory.
When running 1,000 simulations of your plan based on potential stock market returns, only 6% of the scenarios require you to make any changes in order to not run out of money in retirement.
Target "Probability of Success" is above 85% in the first half of your career.
This analysis suggests that your goals of buying an $800k house with 20% down and paying for your future child's college are achievable if you continue to follow the savings plan outlined above.
A 94% "Probability of Success" does not mean there is a 6% "Probability of Failure," but rather a "Probability of Adjustment." A simulation where you come up $1 short is a "failure", when in reality, all it means is that we would need to make an adjustment sometime in the next several decades to save you one extra dollar over the course of your life.
Assumed retirement age: 67.
Monthly Money Review Meeting Structure
Monthly Money Review Meeting Structure
Insurance & Estate
Insurance & Estate
Health
Health
Jen and James are on Jen's health insurance (premium $190/pay period)
Coverage levels:
Deductible: $1,000 indiv/$2,000 family
10% coinsurance for most medical care
OOP Max: $4,500 ind/$9,000 family
I'd like to review all of your health insurance options during your next open enrollment period (Oct 2024)
Life
Life
Based on your income, expenses, and future goals, you should obtain term life insurance policies according to the following specifications:
Jen: $1,750,000 policy, 25 year term
James: $1,250,000 policy, 25 year term
Referral recommendations will be provided via email.
Disability
Disability
Current coverage through work:
Jen: 60% income replacement, taxable benefits, 180 day elimination period
James: 60% income replacement, taxable benefits, 90 day elimination period
If you ever needed to file a claim, this coverage would almost definitely be insufficient to cover your needs given that the benefits are taxed as income. We will explore quotes for supplemental disability insurance in our next meeting.
Other
Other
Please provide copies of your renters and auto insurance so I can review coverage levels.
Estate Planning
Estate Planning
Account beneficiaries: Please review each of your retirement accounts to make sure you have each other listed as the primary beneficiary.
I recommend enacting a full, formal estate plan ASAP. Referral partners and cost estimates will be provided via email.
Investment Recommendations
Investment Recommendations
I am unable to give specific investment recommendations outside of a written client agreement, so I am excluding my normal investment recommendations from this plan.
I use low-cost index funds and ETFs within my clients' investment accounts whenever possible.
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