Planner has epiphany on the edge of darkness


Kristen Perez, CFP®


Here in our Torrance office, we recently took a few minutes out of our work day to observe the Great American solar eclipse.

Our president, Stewart Darrell, fashioned a homemade eclipse projector from a pair of binoculars and a large piece of cardboard.  The lenses on the binoculars focused the image of the eclipse onto a sheet of white paper.  It was tricky to stabilize the position and focus, but before long we were able to view an incredibly crisp, clear image of the partially eclipsed sun.

Though the sun was shining with its typical South Bay cheerfulness, the day was darker, like we were all wearing sunglasses, or a shade had been drawn.  In those moments, one could forgive early civilizations that felt a deep foreboding during these events.

Sometimes, this is how people feel when they come to us for financial advice.

Recently, I had an opportunity to help a new client with a strategic financial plan.  When she came to us, she shared with us that she felt pride in what she had accomplished in life in raising her son and in her career.  Yet, she felt uneasy and anxious about what was yet to come, and she could not tell from her company’s retirement statement if she would be able to travel as she wanted to do in retirement.

Up until that time, she had been relying on general statements that appeared in her 401(k) statement about how much retirement income her account might provide in retirement.  This type of statement uses simple calculations and standard assumptions.

What this boilerplate claim failed to do, however, was to account for her other goals… such as helping her son with a down payment on a house, moving to a new home herself, and traveling the world in her first few years of retirement.

It also failed to address how her 401(k) account would fit in with her other assets, sources of retirement income, and personal tax situation, while allowing her to still enjoy her current standard of living.

I helped our new client quantify her goals and identify which of her goals were the most important to her–helping her son with a home down payment was her top priority; travel was more important to her than retiring at her target age of 65, as long as she could do so while she continued to work.

We reviewed several different scenarios to show the various paths to secure her retirement and accomplish her goals. Developing several scenarios allowed us to model a range of outcomes – some of the variables she is able to control, such as saving and retirement age, others less so, such as longevity.

Through the process, our new client was able to revisit and affirm her ideas about what was most important to her about working and retirement.  She was able to visualize several workable paths to see those through from the financial side.  She was able to weigh her priorities against various risks.

In the end, she chose her preferred path forward to use as her roadmap, which left her with all of her options open, to adjust as her circumstances change.  She left our final planning session beaming and feeling confident that she was in charge of her retirement at last.

The Great American Eclipse reminded me of her experience – falling into the shadow of uncertainty, emerging with new clarity and confidence.