Move South or Help Mom? Conflicting Goals Challenge Clients

Most people wish to do good things with their money, but may need help defining what they want to do and balancing conflicting goals.

By Howard Hook

This column was born out of a simple thought: Most people wish to do good things with their money, but may need help defining what they want to do and balancing conflicting goals.

Before going any further, let’s define what I mean when I say “good things.” For me, doing good with your money can take many different forms. It could mean:

  • Ensuring a comfortable retirement for yourself and your spouse.
  • Financially assisting children, grandchildren, other family members or friends.
  • Educating your grandchildren or other family members.
  • Giving to organizations to help causes you care about.

The interesting thing about the list above is that it does not need to be one or the other. Your clients can do several or all the items on the list. Why can’t they help educate their grandchildren and also donate to causes they care about? Shouldn’t they be able to assist their children financially and still ensure themselves a comfortable retirement?

Prioritization is Key

Prioritization is the key to figuring out how to do “good things” with one’s own money. Helping clients take care of their own financial house usually is the right place to start. After all, how can they help others if their financial situation is precarious?

Looking at my list, you may say that ensuring a comfortable retirement takes priority over the other items. For many, this is likely true. But even that has nuances to it. In certain circumstances, delaying retirement or adjusting one’s retirement lifestyle to help family members may be something they want to consider.

Helping Mom

Recently, clients of mine who were approaching retirement and intending to move south delayed their relocation plans when their mother was diagnosed with dementia. They wanted to remain close to Mom and assist with her care. We helped the family budget for these additional costs and also calculated the amount of long-term insurance reimbursement they would be entitled to.

We have check-in calls every four to six weeks to make sure they have the cash available but, almost more importantly, to provide support during a difficult time for the family. It gives the family comfort to know someone is watching over the finances so they can focus on their mom’s care. Mom is still living at home for now and fortunately can afford to continue to do so, as the cost of around-the-clock home care is more costly then care in a facility.

A Devoted Brother

Another client, who is 78, has taken on the care and responsibility for his brother, who is 10 years older and in failing health. My client originally thought he would need to keep working to help assist with the cost of his brother’s care. We encouraged him to discuss this with his brother to eliminate miscommunication between the two of them. It turned out that his brother was able to pay for his own care, so my client didn’t have to continue working just to fund the care.

Somewhat to my surprise, he decided to continue working anyway because he truly loved what he did. Fortunately, due to other circumstances, he is able to work from home — which reduces his commute and allows him to spend time with his brother. He considers his time working as part of his respite from his brother, who he knows is getting good care and is financially in good shape.

We have also begun to have conversations with our client about making contributions to organizations that help fight the illness his brother has. These conversations would not have been possible if our client thought he needed to keep working to pay for his brother’s care.

In both of the above instances, our clients were still able to accomplish other items they deemed important. They did so by prioritizing what was most important to them and, once that was secure, they moved down their list to achieve other objectives. We were able to assist them with doing this because we previously had prepared a financial plan for them, which we continued to review, update and modify over the years.

A Financial Plan

One of the best ways to help clients understand how to reach multiple, often conflicting goals is to prepare a comprehensive financial plan for them. The plan is not intended to be an inflexible document, but instead a guide to follow, review and update over time to ensure clients are continuing to travel along a path to achieve their multiple goals. The plan sometimes reiterates what you and your clients have always discussed verbally. But for many clients, seeing their goals in writing — along with the resources they have to accomplish those goals — helps better crystalize what needs to be done.

For some clients, what needs to be done is quite clear: save more, cut expenses, or work longer to help achieve otherwise harder to achieve goals. For others, the answer may mean having to prioritize which goals are more important to achieve than others.

For example, if they must choose between a comfortable retirement and educating their grandchildren, they might prioritize a comfortable retirement. That does not mean educating grandchildren can’t be achieved. Instead, it may mean helping clients understand how to modify those two goals so they can be accomplished, even if not as originally intended.

Overcoming ‘Limiting Beliefs’

Sometimes, a client’s limiting beliefs — inaccurate convictions they think are true — prevent them from being as generous as they can and would like to be. Recently, one of our clients held the limiting belief that they could only partially funding their grandchildren’s education. We asked them to reframe their goal and learned they’d prefer to fully fund it. We then backed up their reframed goal by showing them a retirement cash-flow projection that validated they could fund the education cost fully for at least the next 12 months. We plan to review this annually so the client can feel comfortable funding additional expenses without committing to all of it now.

No Sugarcoating

When a client’s goals conflict, tough conversations may be needed. I always tell clients I would never sugarcoat bad news because doing so only makes matters worse.

When bad news needs to be delivered and the plan needs to change, I encourage my clients to avoid having limiting beliefs about what they think they can still accomplish. Yes, difficult decisions need to be made, but in the end, proactively making changes is better than doing nothing and hoping things work out. Hoping and praying is not a financial plan.

Helping clients figure out the best way to do good things with their money starts with understanding what is important to them. Once those goals have been identified, a financial planner can help clients prioritize those goals and work towards achieving them. Modifications may need to be made along the way, but by planning for it the likelihood of success is much greater than playing it by ear.

Howard Hook, CFP, CPA, CAP, is principal and senior wealth advisor with EKS Associates in Princeton, N.J.

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