When Bob and Diane came to see us for the first time they had all the makings of the ideal client. They had diligently saved for their retirements and had a great deal of options in what they might be able to accomplish in terms of their retirement goals. It was clear to us however, they they weren’t as confident as we were.
Often times we have clients who, on paper, have it all figured out, but their state-of-mind is that they are uncertain about what they should be doing. They have dreams, but they do not want to make the move to going after them because they are afraid of making costly mistakes with the money they have worked so hard to accumulate. Sometimes people employ a financial advisor, not to solve a particular problem, but to find validation in order to move forward with a new part of life.
In the case of Bob and Diane, they were trying to merge their relationship and eventually get married—each for the second time. Bob and Diane had different money messages growing up. Both from large families, but Diane was significantly less financially secure than Bob. In addition, Bob had accumulated more money than Diane. They were in different places both mentally and financially.
Both have two children but Bob was widowed and Diane was divorced. Bob and Diane both were worried about their partner’s financial success if something were to happen to the other. Bob was also worried about providing an inheritance for his children since he was their only remaining parent. How were they to stop working and merge their financial lives at the same time? All this in the midst of the great recession.
For most, these types of differences can be extremely challenging. When discussions surrounding money move to family and beliefs and cultural heritage, it is important to be respectful and mindful that comparing apples to oranges is futile. Bob and Diane were mentally and financially prepared we just helped them discover new solutions that incorporated both of their needs, values and backgrounds.
It was 2007 when Bob and Diane had stated they would like to retire next year. Of course hindsight provides perfect clarity but we didn’t have that benefit. However, knowing that they wanted to retire, purchase a new home together and live off what they had accumulated, we had to plan for their immediate and long term financial security.
One of the biggest hurdles was paying taxes. Bob had accumulated a significant amount of company stock. This is not uncommon and what is done with that stock can be vital to long term financial success. In addition to the company stock, Bob had a significant number of stock options that would vest over the next 10 years. The fate of their financial success was directly tied to the success of that company. We were able to convince Bob to sell the majority of the stock and pay taxes. This enabled them to make decisions based on their goals not on the whims of the stock.
As we all know now the stock market collapsed only about a year later. Through careful consideration and for their comfort they each agreed to work one more year. In early 2009 amidst significant uncertainty in the stock markets, they retired. It doesn’t end there, they still had a lot to do to merge their financial lives. The differences in their backgrounds created the possibility for a tough financial merger. For the most part they managed to find common ground on their own and respected their different views on money. I would like to think that we helped a little bit to foster the dialogue.
They now reside in Burlington, Vermont overlooking Lake Champlain. They both embrace living an active life. Bob is now the captain of their beautiful Tartan 3400 sailboat while Diane teaches yoga as a master instructor. They are a big part of their grown children’s lives, helping guide them through the challenges they face. They travel freely and live comfortably knowing that they have the financial skills and resources to ensure comfort in retirement.