Robin had not been able to face even opening up the statement envelopes from her broker. She had never felt she understood her 401k statements and these were going to be even more complicated. So we opened one up together and took a look.
When Beth and Brian returned they had smiles on their faces. Clearly they were past the decision point about college and were very relieved.
Given Robin’s recent inheritance, it was clearly time for her to pay off her consumer debt. She had the remainder of a car loan, which I told her to pay off right away, as well as her credit card balance of $3,000. I suggested that she might want to change her outlook on how to use credit cards going forward. Credit cards, when the balance is paid off monthly, give you the opportunity to get some cash back or rewards for their use. I suggested that she spend a little time at the website www.creditcard.com to find a rewards card that matches her needs., some offer discounts on airline tickets or free flights, others give pay you back in gift cards to buy gas or are affiliated with major retailers. Even though she had carried a balance for years, she had a good credit rating from always making timely payments, and would have no problem getting a card with rewards.
The last time we met was disappointing for Ramona who had hoped to retire soon, so I hoped that we could do some strategic planning this time around to give her more hope that she could make a significant change in her life. It seemed to me that there was more than one option for her. Alex suggested that he would support her making a change as long as it didn’t jeapardize their future or mean that he would have to work forever to make up for her early retirement.
Looking forward into Beth and Brian’s future was essential to helping them make a decision about their daughter’s education. Could they afford to pay Yale’s tuition, probably having to take out student loans to cover the costs?
Robin walked in the door timidly, clearly feeling out of place meeting with a financial advisor. “I don’t even know where to start”, she said. “I’ve got statements from the inherited account and my tax return from last year, but that’s kind of irrelevant at this point. Won’t I have to pay a lot in taxes from inheriting so much money?”
Alex and Ramona came into the office with the usual pile of papers and folders. Ramona started the talking. She seemed the most animated and invested in our work together, as she had the most at risk. Her heart was no longer in her job and she wanted retirement as soon as possible. Alex, on the other hand, was quiet until after his wife had made her case.
When Beth and Brian arrived for their first appointment, they were well prepared. They had completed the questionnaire carefully and had files of statements from their retirement accounts and their recent statements from their banks and joint taxable account at Fidelity.
In the email Ramona sounded in a rush to get started. “I’d like to set an appointment soon. I hope you’re taking new clients. I am close to retiring, hoping to leave my job next year. My husband, Alex, is younger than me, and won’t be retiring for a while. He doesn’t trust that our nest egg will last if I quit now. I’m afraid that I’m kidding myself too and I really don’t have enough money to stop working yet. He worries that the pressure’s all going to end up on him to keep working forever. But I’ve had enough and want to get out as soon as I can. And I have saved up quite a bit. Do you have any time to meet with me in the next couple of days?”