The $12.5M Sale That Still Required Careful Math
The Client:
A Dream Exit Meets a Sobering Reality
At 62, a successful entrepreneur was finally nearing the finish line. After decades of building his business, he was ready to sell, spend more time with his wife, who was facing serious health challenges, and enjoy the lifestyle he had worked so hard to create.
He believed his company would fetch $20 million, maybe more. But when independent valuation specialists assessed it at closer to $12.5 million after tax, panic set in. Could that really be enough?
The questions began to pile up:
Would $12.5 million support the $300,000/year after-tax lifestyle he envisioned?
Could his plan keep up with inflation over three decades or more?
And with excellent health and longevity in his family, could his capital last into his 90s?
A corporate finance advisor referred him to Westmount Wealth to help answer those questions, with clarity, precision, and planning.
Understanding the Anxiety: When the Numbers Don't Feel Safe
The client already feared that $12.5 million wouldn’t be enough. And when we introduced the universal risks all retirees face, market volatility, inflation, and longevity, the situation felt even more precarious. What began as anxiety turned into a sense of urgency: how do you build lasting confidence in the face of so many unknowns?
Market Volatility: Would a downturn early in retirement devastate his portfolio?
Inflation: Would future purchasing power quietly erode his lifestyle?
Longevity: Could his money last if he lived another 30+ years?
We didn’t guess. We modeled.
Sequence of Returns Risk: Timing Can Make or Break a Plan
We ran side-by-side simulations to demonstrate a concept that catches many high-net-worth clients off guard: sequence of returns risk.
Scenario A: Markets grow steadily at 5% annually
Scenario B: Markets drop 20% in the first two years, then recovers and average 5%
Same average return. Very different outcomes.
In Scenario B, the early losses combined with ongoing withdrawals caused the portfolio to shrink dramatically, a compounding drag that made the $300,000 income goal much harder to sustain.
Even wealthy clients can be surprised by how quickly early losses alter the long-term picture. Retirement isn’t just about how much you have. It’s about how long it will last and under what conditions.
Modeling Results: A Foundation of Confidence
Despite the risk of early market declines, rising inflation, and a multi-decade retirement horizon, our modelling clearly showed that the post-tax proceeds could reliably support the client’s income goals, even in stressed scenarios.
This clarity gave the confidence to move beyond the question of "Can I retire?" and focus instead on how to invest purposefully.
Now the real work could begin: designing a portfolio that did more than just grow capital — it needed to protect it. We structured the strategy to face the three key threats directly: sequence risk, inflation erosion, and the demands of longevity
The Strategy: A Pension-Inspired, Liability-Matching Approach
To address these challenges, we applied a strategy borrowed from the world of pension fund management: liability matching.
We didn’t treat the portfolio as one big bucket. Instead, we segmented it into time-based income buckets:
Years 1–5: Liquidity and Safety
About $1.5 million was allocated to High Interest Savings, GICs, and target-maturity bond ETFs that matured each year. This created a "retirement paycheck ladder," ensuring predictable income and avoiding forced asset sales in volatile markets (sequencing risk).
Years 6–10: Stability and Yield
Roughly $3 million was invested in income-producing real estate and private credit, investments selected for their steady yield and low correlation to public markets.
Years 10+: Growth and Inflation Protection
The remaining $10.5 million was allocated to equities, infrastructure, and growth-oriented alternatives, designed to hedge inflation and grow over the long term without pressure to fund near-term cash flow.
The Result: Confidence Restored
By breaking down his plan into time-sensitive components and stress-testing every scenario, we showed the client that even with a $12.5 million after-tax outcome, his goals were still achievable. He could retire with confidence, support his wife, and preserve his legacy.
He didn’t just see a portfolio. He saw a plan.
Key Insights
Average Returns Lie: Timing matters far more than averages.
Retirement Is a Cash Flow Problem: Income timing is as critical as investment selection.
Buckets Build Confidence: Liability matching adds clarity and structure.
Integration Wins: Taxes, risk, investments, and estate all must work in harmony.
This information has been prepared by Mehul Gandhi, CFP®️, CLU®️, TEP who is an Estate Planning Specialist and Senior Insurance Advisor for Westmount Wealth Planning Inc. Westmount Wealth Planning Inc. is a subsidiary of Westmount Wealth Management Inc. Westmount Wealth Management Inc. is registered as a Portfolio Manager in British Columbia, Alberta, and Ontario.
This material is distributed for informational purposes only and is not intended to provide personalized legal, accounting, tax, or specific investment advice. Please speak to a Westmount Wealth Advisor regarding your unique situation.
