Physician Couple with Public Pensions and Estate Planning Needs

Betsy and Tyler Armstrong

Betsy and Tyler Armstrong are both physicians in their early 50s. They live in Cambridge with their two teenage children and beloved golden retriever. Betsy has spent her entire career in the public sector—the first twelve years as a military doctor before settling in Massachusetts, where she is now employed by the state. She is entitled to multiple public sector pensions (federal, state, and local) in addition to her Federal Thrift Savings Plan, Massachusetts “SMART” Plan, and Social Security benefit. Betsy would like to know how much it will all add up to in retirement. Tyler, on the other hand, runs a private practice. He would like to explore options for a self-employed retirement account and see if he can reduce his large tax bill. He is also curious and a bit skeptical about Health Savings Accounts (HSAs), but he figures that, as doctors, he and Betsy should really know more about them. Finally, Betsy and Tyler know they need to do their wills but are not sure about the other documents they should incorporate into a broader estate planning package.

How Artemis Helped

  • We performed a detailed assessment of Betsy’s retirement income sources, which revealed that her public pensions and Social Security benefit would more than cover her non-discretionary expenses in retirement.
  • We provided a cost and coverage comparison under multiple scenarios of the Armstrong’s current PPO health insurance versus a high-deductible health plan with health savings account (HSA). Betsy and Tyler were surprised to see that they would save about $3,000/year on their overall health care costs and taxes by leveraging the HSA.
  • We advised Tyler to setup a cash balance pension plan along with a Roth 401(k) with in-service distributions as part of a broader strategy to reduce taxes and enable annual backdoor Roth conversions..
  • We recommended the Armstrong’s create an irrevocable life insurance trust (ILIT) and a revocable living trust to achieve their estate planning goals of passing assets to their children and minimizing the Massachusetts estate tax.We introduced Priya and Manish to sustainable investing.

How Betsy And Tyler Benefited

  • Betsy finally had a full picture of her projected retirement income and the flexibility it would afford her in retirement.
  • Betsy and Tyler began funding a health savings account (HSA) to lower their expenses and save for retirement medical expenses in a tax-efficient manner.
  • Tyler was pleased to leverage additional benefits of self-employment that he had not previously considered.
  • After completing their estate plan, Betsy said she had the best night’s sleep in over a decade knowing it was no longer hanging over her head.

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