By having the client map out their financial goals through the planning process with LRVS Advisory Group, the advisor utilized a three-prong approach. First, after looking at the 401(k) portfolio and realizing the lack of diversification, the advisor took advantage of the ‘personal choice retirement account’ (PCRA), which allows individuals to invest in a wider range of investments than the more restrictive traditional 401k alternative. The SDBA/PCRA is designed to help investors in three ways: increased diversification, additional flexibility, and the option of professional guidance in managing their retirement savings.1
Secondly, due to the client’s income they were looking for ways to save tax efficiently. The clients made too much income to add to a Roth IRA, so the advisor looked at back door Roth strategies, and identified a need for additional tax free savings. The couple purchased a $1.0 million cash value life insurance policy in order to create a potentially tax-free bucket
Finally, the advisor created a plan for the couple’s savings by placing their $600,000 into a brokerage account, allowing the cash to work harder for the couple. Rather than investing in a 529 education plan for their daughter who was attending college relatively soon, the benefits of the brokerage account outweighed those of the 529 plan.