Executive with a New Job
Experiencing a Life Change
Primary goal: Understand the impact of a new job offer on family finances.
The Background
Judy never expected to be asked to head up the Key Initiatives Division– a great opportunity that came with many new financial issues to consider. The transition would require a move from Texas to California – how would that impact the family and their finances? The compensation increase would be primarily deferred compensation, including stock options – but she already had most of their wealth concentrated in the firm’s equity. “How much is too much?” she wondered. Judy realized that this transition was both exciting and filled with uncertainty.
The Challenges
- Understand the impact of moving to California on their family finances, including taxes and education costs.
- Evaluate alternatives for housing in California and whether to sell their current home in Texas.
- Manage the exposure to company stock and formulate a strategy for the company stock options.
How We Helped
To help her evaluate the financial impact, her HTG advisor provided a “what-if we moved to California” update to her financial plan and developed an investment strategy to manage the concentrated equity exposure under various scenarios.
- Quantified the tax impact of California taxes
- Helped consider the cost and impact of her childrens’ education in the new location
- Modeled rent versus buy housing scenarios
- Quantified how much was reasonable to spend on housing
- Modeled various stock option strategies
- Ensured the rest of their investments were well-diversified
