The High Stakes of

Leaving a High-Tax State

LIFETIME INCOME CASE STUDY

Donald and Sheryl Lotsabucks
Registered Investment Advisor

Presented by Financial Sense Advisors, Inc.

 Important Notice:
This is a hypothetical illustration based on real life
examples. Names and circumstances have been
changed. The opinions voiced in this material are
for general information only and are not intended
to provide specific advice or recommendations for
any individual. To determine which investments or
strategies may be appropriate for you, consult
with a financial advisor prior to investing.

Financial Sense Advisors, Inc.

Registered Investment Advisor
WHO ARE DONALD & SHERYL?
Age: 63 & 64

Job: Defense Contractor & Educator

- Donald likes idea of staying in the bay

area but concerned about CA’s high taxes

- Sheryl would like to relocate somewhere

quieter and slower paced

- Seeking a professional to help determine

how they can retire most comfortably
WHAT IS IMPORTANT TO DONALD?

Being able to retire

soon Living the lifestyle they
desire

Donald

Managing high taxes

WHAT IS IMPORTANT TO SHERYL?

Spending more time with

Relocating to a more family
peaceful place

Sheryl

Enjoying a better lifestyle

in retirement
 DONALD & SHERYL’S CURRENT RISK
TOLERANCE?

Most Conservative 1 - 20 - 30 - 40 - 50 - 60 - 70 - 80 - 90 - 100 Most Aggressive

Current Risk Score Portfolio Risk Score

48 52
DONALD & SHERYL’S CURRENT BUDGET

Income $260,000
Expenses ($230,000) Discretionary
30%

Surplus $30,000
Living Expenses
70%
DONALD & SHERYL’S RETIREMENT BUDGET
IF RESIDING IN CALIFORNIA

Income $170,000
Expenses ($227,000) Discretionary
28%

Shortfall ($57,000)
Living Expenses
72%
DONALD & SHERYL’S RETIREMENT BUDGET
IF RELOCATING TO ANOTHER STATE

Income $170,000
Expenses ($205,000) Discretionary
32%

Shortfall ($35,000) Living Expenses

68%
 DONALD & SHERYL’S BALANCE SHEET

Home + Portfolio - Liabilities = Net Worth

$1,300,000 $1,712,000 ($359,000) $2,653,000

DONALD & SHERYL’S ASSET ALLOCATION

2%
15% Asset Allocation
Stocks
48% Bonds
Cash
35% Hard Assets
DONALD & SHERYL’S FINANCIAL PLAN CHALLENGES

1. Getting them to agree on where to

relocate.

2. Managing expenses in retirement.

3. Closely monitoring taxes.

DONALD & SHERYL’S RETIREMENT INCOME STRATEGY
IF RELOCATING TO ANOTHER STATE

Pension

$121,000
+ Social
Security

$49,000
+ Portfolio

$53,504
= $
Total
Income
$223,504

Investment Portfolio Expenses ($205,000)

Donald Retire. $1.12M Stocks & Bonds @ 3.2%1 $35,840
Surplus $18,504
Sheryl’s Retire. $282K Stocks & Bonds @ 3.2%2 $9,024
Taxable Accts. $270K Stocks & Bonds @ 3.2%3 $8,640
PMs and Cash $40K

1,2 & 3: Yields are for current portfolio yields as of 4/30/18. Please see disclosures at the end of this presentation for security risks.
 GOAL BASED RECOMMENDATIONS
FOR DONALD & SHERYL
Deciding a place to retire
• Vacation to places they would
consider living
• Helped them explore what they want
retirement to “look like”
Managing taxes
• Advised them to work with CPA to
determine projected taxes for each
state they considered moving to
Living lavishly in retirement
• Sell CA home and purchase cheaper
property in different state
• Relocating would lower living expenses
and create additional assets to fund
retirement
Breaking clean from CA
• Sell all property and interests in CA
• Establish residency in new state and
update estate plan
• Work with attorney to tie-up potential
loose ends
 Disclosures:
1. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values
will decline as interest rates rise and bonds are subject to availability and change in price.

2. The payment of dividend is not guaranteed. Companies may reduce or eliminate the
payment of dividends at any given time.

3. The information in this material is not intended as tax or legal advice. Please consult legal
or tax professionals for specific information regarding your individual situation.

Financial Sense Advisors, Inc.

Registered Investment Advisor
Financial Sense® Advisors, Inc.
Registered Investment Advisor

If you have any specific questions or comments, please give us a call at

(858) 487-3939
We’re happy to speak with you.

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10809 Thornmint Road 2nd Floor - San Diego, CA 92127-2403
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