7. Is early retirement an option at work? Firms often make it attractive for veteran employees to agree to leave before their official retirement date. The firm might accelerate vesting or contributions to their pension plan. Is this an option? What will the firm do for you to make it worthwhile?
8. Don’t forget suspended money. The firm might have golden handcuffs, or stock options that take years to vest and transfer to the employee. Early retirement programs might come with benefits in this area. What is the “money they can’t touch” worth?
9. Is relocating to a lower cost of living state an option? Your client might have been thinking about this alternative. People have been moving out of the Northeast and into the South and Midwest for years. Your client might know more about it than you do. What are the benefits of moving?
10. What are the tax consequences? If your client sold real estate to buy assets that could produce income, one or more taxable transactions have taken place. If they sell growth stocks to buy bonds, capital gains are likely part of the equation. What will it cost in taxes (and fees) to realign their assets?
I Love It When A Plan Comes Together
At this point you are doing something incredibly proactive for your client. They would have considered it arrogant or wishful thinking to say: “I want to never work again. Can you make it happen?” You have introduced the subject. You have their attention.
1. Develop different scenarios. There might be the early retirement package at work scenario. There might be the save and retire in a few years scenario. There might be the move to Indiana scenario.
2. Develop the minimum expense baseline scenario. Sometimes circumstances beyond our control happen. Suppose they were suddenly downsized and getting another job proved difficult. This might be the “in case of emergency” option.
3. Develop the reduced income scenario. Consider the lifestyle they want in one or two of the different scenarios outlined in #1 above. Would doing one on 80% (or thereabouts) of their desired income work?
Your client isn’t going to take action now. This takes lots of planning and preparation. You have shown them what is (or could be) attainable. Most important, you have got them focused on spending less and saving more in the near term.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book Captivating the Wealthy Investor is available on Amazon.