At a glance
- Michael Kitces and Carl Richards made the case on episode 203 of Kitces & Carl, Kitces — Nerd's Eye View reported.
- Their suggested sequence is to rebuild the outcome with the client instead of handing down a verdict.
- Advisors should then state how severe the shortfall is and the probability that spending must fall, without downplaying or catastrophizing it.
Advisors who inherit a client set on an unaffordable retirement should rebuild the projection with the client rather than criticize the prior advisor. Michael Kitces and Carl Richards made the case on episode 203 of Kitces & Carl, Kitces — Nerd's Eye View reported.
Their suggested sequence is to rebuild the outcome with the client instead of handing down a verdict. If the client is stuck on the earlier advice, they suggest requesting the previous advisor's meeting notes to check whether anything was missed.
Advisors should then state how severe the shortfall is and the probability that spending must fall, without downplaying or catastrophizing it.
For advisors, the practical order is to get the prior file, rebuild the projection with the client, then price the spending gap before discussing levers. Which adjustments follow is the client's call. Options run from working part-time for several more years to selling assets, and some cases carry urgency. Clients are sometimes more open to changes such as downsizing than anticipated, the pair note.
Reported by the Tax & estate planning desk from Kitces — Nerd's Eye View. Published . Corrections