From Service to Civilian Life:
The Billings Family
The following story is inspired by real client work. Names, images, and identifying details have been changed to respect confidentiality.
Navy Captain James Billings and his wife, Melissa, reached out a couple of months before his retirement ceremony. After three decades of service, they were excited to close one chapter and begin the next. Their final duty station had been in Rhode Island, but James already had his next step lined up with an executive position at Amazon Web Services (AWS) in Oregon.
Melissa, meanwhile, was at a turning point of her own. After years of teaching across different schools, she was ready to move on from the classroom. Burned out but motivated, she dreamed of starting her own business. She wanted something that matched her passions and could also create meaningful work for their disabled son, giving him the chance to be part of something they could build together as a family.
Their first priority was selling their Rhode Island home. With so much in transition, we encouraged them not to rush into buying in Oregon. Instead, we recommended renting for a while to take the pressure off finding the perfect home and give them breathing room to adjust.
Overlaying all of this was James’s new pay and benefits package at AWS. It was substantial: a $200,000 base salary, a $200,000 first year bonus, a $150,000 second year bonus, and $200,000 in restricted stock units vesting over four years. Add to that his military pension, and soon after a VA disability rating of 100% permanent and total, and their financial picture was dramatically different from what they had ever experienced before.
At first, the numbers felt overwhelming. James and Melissa struggled to imagine what this level of income would mean for their daily lives. But by slowing down the move and easing into their new normal, they were able to settle in comfortably. Within a few months, they were looking for a new home with a completely different outlook on what was possible.
They initially chose to rent in Washington, hoping to take advantage of lower state taxes, with James commuting an hour each way to work. But after only a few weeks, James realized the savings were not worth the strain. They quickly shifted their focus to buying a home and land in Oregon instead.
Through ongoing conversations, something else became clear. Melissa’s dream was to own land and raise animals, turning that into a family business. James’s goal was different but complementary. He wanted to work intensely for five years and then transition to a work optional lifestyle.
Their goals were ambitious but clear. They wanted to buy a home with land in Oregon and pay it off within five to seven years. Melissa was determined to start her business, complete with animals and the equipment needed to run it. Together, they wanted to pay off $75,000 in consumer debt, replace both of their aging cars, and eventually reach a work optional lifestyle where James could step back after their home was paid off, leaving them both free to focus on the farm and to travel as they wished. Above all, they wanted to create a lasting benefit for their disabled son, ensuring he would continue to be supported long after they were gone.
We began with tax planning. With James receiving both his Navy pension and his new income from AWS, including significant bonuses, it was important to make sure their withholdings covered both state and federal obligations. That first step gave us a clearer picture of their true net income and what their cash flow would look like.
As they settled into their new lifestyle, we looked closely at their spending patterns. By examining their mandatory and discretionary expenses, we were able to build a projection of what their lifetime spending might look like. On top of their expenses, we included big goals like a paid off home, cars every few years, and their legacy for their son. We also included the uncertainties such as the possibility of long term care for either James or Melissa later in life. This gave us a number to aim for.
Next, we mapped out their guaranteed income streams: James’s military pension, his VA disability payments, and eventually Social Security. Comparing those reliable sources against their projected lifetime expenses revealed a gap, the amount we would need to cover through investments.
On the investment side, James already had $300,000 in tax deferred savings in his Thrift Savings Plan, and Melissa had about $25,000 spread across several 403(b) accounts. With their new household income placing them firmly in the 32% tax bracket, we designed a strategy to manage taxes both now and in the future. James continued to maximize his tax deferred contributions to his Amazon 401(k), and we opened both tax deferred and Roth IRAs. While their income was too high for direct Roth contributions or deductible IRAs, we were able to implement annual backdoor Roth conversions for each IRA while James was working at Amazon.
The most powerful tool, however, came from Amazon’s retirement plan itself. The company allows additional after tax contributions to the 401(k), up to the annual IRS additions limit. This opened the door for what is known as a mega backdoor Roth conversion. Any after tax money contributed could be immediately converted to Roth, with taxes only owed on any growth between contribution and conversion. This strategy allowed them to save aggressively while building a pool of tax free retirement assets for the future.
Together, these steps put them on track to pay off their new home and land within their five to seven year goal, launch Melissa’s business, and replace their cars, all while saving in the most tax efficient way possible. Looking ahead, we know there are still areas to refine. James’s TSP and Melissa’s 403(b) will eventually create required minimum distributions that add to their tax liability after age 75. Depending on when James decides to step back from work, we may have opportunities for additional Roth conversions to smooth that tax burden.
We examined their insurance and estate needs. Outside of Survivor Benefit Plan, what else would Melissa need if something happened to James? What else would their son need if something happened to both James and Melissa? What assets would be passed to their son and how? When? Who would control the special needs trust? We looked at all of these factors in addition to the lifetime cash flow for peace of mind that loved ones would be cared for in the way they desired.
This plan, as with every plan, will change as the Billings’ life changes. By laying this foundation they are positioned to achieve their goals with confidence.
Every military family’s story is unique, but the questions and challenges at retirement often feel familiar. If you are approaching this transition, I would be honored to help you create a plan that fits your goals, just like we did for the Billings family.
Planned for:
Military to civilian life
Relocation
New workplace benefits
New business
Special needs
The life they dreamed about