Aging parents, kids in college; change of plans

Jill SFG clients Jill and Arshadand Arshad never thought the term, “sandwich generation” would fit their situation. For years, they had lived off Jill’s corporate salary as an HR benefits leader for a technology company while they banked Arshad’s. Arshad, two years older at 60, is senior manager for a private security contractor for U.S. Homeland Security. He has been building up nonqualified deferred compensation. Meanwhile, both spouses are contributing the maximum to their 401(k) plans.

Life is good, and they have progressed steadily toward their financial goals. At the same time, Jill feels stretched thin from a time and cash flow perspective. She accepted a senior position last year with a promising tech startup. And, after their second daughter left for college last year, they invited Arshad’s Mom to move in to relieve her financial burden. Jill’s own parents live independently at a nearby life care facility. Mom and Dad are financially set but need her attention and care. Her mother-in-law relies on her for transportation to doctor’s appointments and she checks in regularly with her own parents.

Between their aging parents and having two in college, Jill and Arshad are feeling the pinch. They have been supplementing college costs by exercising Jill’s Incentive Stock Options (ISOs), which she has accumulated over 12 years with her previous company. The last ISO exercise resulted in less free cash than previous ones and she was caught off guard when unawares she triggered a disqualifying disposition, resulting in a significantly higher tax liability due to the substantial additional ordinary income.

The startup she has joined recently awarded her Restricted Stock Units (RSUs), about which she has some questions. She wonders whether there are better sources of cash flow than RSUs to meet college expenses.

In business, she often engages an outside perspective, and she employs the same philosophy personally. She is looking for a firm that knows equity compensation benefits just as well as she knows health and employment benefits. She wants a professional to do a “deep dive” on her equity compensation, provide objective planning and expert advice. She and Arshad do not want to pay one dollar in taxes beyond the six figures they current pay each year. Jill figures by bringing other professionals into her circle, she avoids making mistakes in executing her equity compensation and gains a prudent plan to build for the future.

*The name, likeness, and circumstances in this example are a fictional composite of facts from executives similar to actual SFG Clients.

Tagged: sfg wealth planning services, retirement planning, retirement, wealth management, personal financial planner, performance awards, performance shares, restricted stock units
Posted In: Executive Compensation, Fiduciary, Performance Shares, Planning