High-Flying Couple Is Managing Just Fine

I’ve been reading the Money Make-Over feature since it started. The articles generally are of great interest, since you usually cover people in situations that your readers can identify with: the woman who lost her savings in some kind of scam and must have a plan to make it back; the couple nearing retirement who want to know whether they should consider changing their investment plans; the younger couple wondering how to do the most with what they have.

And then comes “Feet Off the Ground?” [Jan. 20] on the married pilots. Who cares? At 44 and 34, they already have assets over $1 million, they make over $300,000 annually, they’re not going to have kids, they take several expensive vacations a year, they buy their cars for cash, and they want to “die broke.”

Well, isn’t that just peachy!

Why bother with these high fliers? It’s obvious they’re satisfied with living the carefree life, and upon hearing the financial advice (Get into index funds? I would have advised the Steadman funds for this pair) “they want to take some time before deciding on anything.”

Poor things. What to do, what to do? Not to worry; the advice includes “Increase savings . . . by $1,450 a month.”

What’s next, a make-over for Warren Buffett?

ED BRESNAN

Long Beach

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These two pilots whose financial goal was stated as “Devise an approach that will allow for early retirement yet preserve capital” are not alone with their feet off the ground. The second-opinion planner provided great globs of wisdom about dying broke, working forever, giving to charities and the value of fixed annuities, apparently lecturing the congregation about those not in attendance. They won’t accumulate $15 million unless they work for 40 more years, and that isn’t their goal.

Ms. Practical Planner, as opposed to the Oracle, solved the pilots’ problem with “save more and do it in index funds and municipals.” One can’t fault such a recommendation, but touted to “greatly reduce taxes,” it isn’t enough.

Earning $300,000 per year obviously generates a huge income tax burden. Since their income properties are limited to a $25,000-per-year write-off, regardless of their lack of hurry for homeownership, the dollars heading to Washington could be building equity for their future in such ownership, now. Admittedly, index funds create fewer tax consequences through capital gains distributions, but no taxes would result if they contributed additional savings to a variable or indexed annuity.

Lastly, taking umbrage with the risk factors in their stock portfolio simply takes all the fun away from this serious investing. They’ve got the assets to speculate in such an investment vehicle, where the wins are bigger and the losses deductible.

THOMAS E. KOLANOSKI

Certified Financial Planner

Costa Mesa