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Case Study 1


Financial Planning

The Challenge

Suppose a family came to us with three small children, husband employed full time, and owned several real estate assets with one other partner. Concerns were saving/paying for college; saving for retirement; an appropriate time to sell company stock from annual RSUs and equity awards; utilizing and planning for future increased cash flow from real estate assets; the purchase of a new house better suited for the family’s needs. Current investment allocation was over weighted in employer company stock and personal insurance coverage was inadequate. Risks existed within the business partnership to both partners’ families.

The Approach

In this scenario, Matson Financial Advisors, Inc would provide a snapshot of the client’s current situation to help identify potential shortfalls in achieving the long term goals of saving enough to support retirement and pay for college. With ongoing review of the plan, we would identify a savings need as well as offer guidance for timing of the sale of company stock. By reviewing insurance needs, options would be provided to overcome any deficiencies in both personal and business coverage. By reviewing cash flow from real estate assets we could project anticipated income over time and provide a plan for investment of potential income.

The Recommendations

  • Summary and recommendations of next steps to help meet goals would be provided to the client. 
  • Establish 529 college savings accounts for each child with automatic monthly contributions. 
  • Establish a new joint investment account to build non-qualified assets.
  • Purchase a 20-year term life insurance policy to cover education costs until children are out of college. 
  • Utilize the sale of client’s company stock to provide funding for a potential purchase of a new home.
  • Establish a buy/sell agreement funded through the purchase of term insurance providing protection for both families.

Please Note: These are hypothetical examples of possible solutions, each individual client's situation is different, and that the reader should contact a financial advisor for advice on their investment options. Before investing, the investor should consider whether the investor's or beneficiary's home state offers any state tax or other benefits available only from that state's 529 Plan.