Financial professionals, what is your approach to having to adjust a client's retirement plan due to a major life change?

Question

When a major life event necessitates a revision of a client's retirement plan, we turn to seasoned financial professionals for their strategies. From embracing life changes to tailoring advice for individual life events, here are eight expert insights shared by Certified Financial Planners and Private Wealth Managers on how to adeptly adjust your approach.

James Sahagian · Answer

When life takes an unexpected turn—be it a joyous new marriage, a challenging health issue, a heartbreaking divorce, or an unforeseen job loss—it's a profound moment to reassess your retirement plan. These aren't just financial events; they're transformative chapters of your life story. Your retirement plan should evolve with your dreams. This may mean adjusting your savings, rethinking your retirement age, or shifting your investments. Embrace these changes with courage and collaborate closely with your financial advisor. Together, ensure your retirement plan not only adapts but thrives, safeguarding the future you've dreamed of no matter where life's journey takes you.

Chad Lively · Answer

When adjusting a client's retirement plan due to a major life change, my approach is to first thoroughly understand the new circumstances and their financial impact. I conduct a detailed review of their current financial situation and retirement goals, and then reassess their needs and priorities. For example, if a client faces an unexpected early retirement, I would analyze their income sources, adjust their savings and investment strategies, and possibly reallocate assets to ensure they can still achieve their retirement objectives. Clear communication and a personalized plan are key to successfully navigating these changes.

Sean Polley · Answer

Major life changes happen more often than we realize, and retirement planning is dynamic because of the many life changes, both minor and major. The first step is to re-evaluate the situation to get clear about what has changed. Then we need to discuss how these changes have impacted our needs as we move forward. Because of this change, have our priorities and goals changed? If they have, and many times in a major life change they do, we need to adjust our strategy for these new priorities.

George Reilly, ChFC® · Answer

There are several life changes that can create an adjustment in your financial plan. Over the years, we have had several clients become disabled or pass away prior to retirement. This leaves a tremendous burden on the surviving spouse and/or children. It always depends on how much was saved, how much life insurance was in place, or if someone had disability or long-term care insurance. We use the expression 'Noah built the ark on a sunny day.' This is a perfect description of insurance. No one can ever predict their future, but having the right protection in place allows your financial plan to continue on.
For those who don't have the right protection, everything from tightening the belt to relocating has been the most popular. The fact that real estate prices have grown significantly over the years means that folks who have major life changes can move to a ZIP code to save on taxes and pocket the equity for extra expenses. This is a reminder that we always need to review our plan at least on an annual basis.

Patrick Ritter · Answer

Explore their values together and how they see their life changing as a result of this major life change. 
Then explore how they will use their money to live a life aligned with those values. I often see clients wanting to focus more on relationships and experiences over lifestyle spending.
A client of mine was overworked for 20 years at a company, and when suddenly let go, he took a lower-paying job but with more balance. He chose to use some cash reserves for a trip celebrating family milestones (graduations) and making up for lost time.
Adjustments to their savings rate will need to continue in order for them to retire on time, but in the meantime, we’ve completed Roth conversions in this lower-income year and are using cash-value life insurance policies to fund a long-term care solution. I’m working with both adult children now, who will both be independent in the next year.
Planning for changes like this requires empathy, understanding, and the money/technical answers too.

Delante Greer · Answer

When a major life change necessitates adjustments to a client's retirement plan, my approach centers on flexibility, communication, and strategic realignment. First, I sit down with the client to fully understand the new circumstances, whether it's a family change, health issue, or job transition. We review the existing retirement goals and assess how these changes impact their financial outlook. Next, I use detailed cash-flow projections to visualize different scenarios and their potential effects on the retirement timeline and resources. This helps in making informed decisions about necessary adjustments, such as changing investment strategies, altering savings rates, or revising spending plans. Throughout this process, clear and frequent communication is vital to ensure that the client feels supported and confident in the revised plan. My goal is to provide stability and reassurance, demonstrating that their retirement goals can still be achieved, albeit through a modified path. This personalized approach helps clients navigate through uncertainty with a sense of control and clarity about their financial future.

Brenna Baucum, CFP®, CTS™ · Answer

Working with some of my client families for over a decade, we've seen the adage, 'Change is the only constant,' prove itself truthful. We proactively co-create a financial plan that allows life to happen. My approach focuses on regular contact and deep conversations, which give me a clear window into what is happening in their lives so we can adjust the plan accordingly.
When life throws in a hiccup, we adapt through shifts in spending, timing around goals they want to achieve, and other flexible elements. These changes can be happy celebrations, like children marrying or grandchildren graduating from college. They can be complex, like dealing with an empty nest and retirement. They can be tragic, like addiction issues in adult children or the loss of a spouse. My approach invites clients to share openly, which helps me serve as a thought partner, making the transition easier.

Francis Walsh · Answer

Our approach to adjusting a client's retirement plan due to a major life change is all about personalized, proactive planning. We start by sitting down with the client to fully understand the impact of the change, whether it's a new job, marriage situation, sudden windfall, or a significant health event, etc. From there, we reassess their goals and current financial situation, making necessary adjustments to ensure they stay on track for a secure retirement. We emphasize transparency and clear communication, ensuring clients understand every step of the process. By tailoring our advice to each individual's unique circumstances, we help them navigate changes confidently and keep their financial future bright. These events can and will happen to many people in their lives, and what's important is to understand we just have to control what we can and make the next best moves.

How Do You Adjust a Client's Retirement Plan for Major Life Changes?

How Do You Adjust a Client's Retirement Plan for Major Life Changes?

Embrace Life Changes

Personalize Plan After Thorough Review

Re-evaluate Priorities and Goals

Incorporate Insurance for Financial Continuity

Align Finances with Evolving Values

Strategize with Flexibility and Communication

Adapt Financial Plan with Regular Contact

Tailor Advice to Individual Circumstances