Preparing for a Future You Didn’t Expect

by Charles Andriole, CIMA®, CPM®, Founder and Managing Director

We have worked with clients whose careers and financial lives became closely connected to the success of the businesses they helped build. When things are going well, it is natural to make plans based on expectations about future income, continued employment and the value of an ownership interest. A change at the company can alter those expectations quickly.

That happened with clients of ours after changes in the ownership and performance of their business created uncertainty about their futures with the company. The financial outcome they had once anticipated was no longer as certain, and there was a possibility that their careers there could end earlier than had been planned.

The situation raised an important question: If work ended sooner than expected, would they be financially prepared?

Understanding What an Earlier Exit Would Mean

Answering that question requires us to look closely at how a client actually lives. Years of strong earnings may have supported comfortable lifestyles, and perhaps there has been little reason to scrutinize every expense while those earnings continued. The possibility of an earlier departure changes the importance of those numbers.

We spend time developing a realistic understanding of spending and the resources needed if employment income stopped. Part of the process requires candid conversations. It is difficult to determine whether someone’s current lifestyle can continue without an accurate understanding of what that lifestyle costs.

Once we have that information, we can begin answering the questions that create so much uncertainty.

Knowing Where You Stand

Analysis can show a client a path forward even if careers end earlier than expected. There may be parameters they would need to understand, and their financial lives would have to be managed accordingly, but an unfavorable outcome at the company would not leave them without options.

That understanding can give confidence at an important time.

Financial “organization” requires people to step back and look at all the pieces. When uncertainty surrounds your career, it can become difficult to separate what is happening at work from what it means for your family. Organizing the financial picture helps establish what is within control.

Preparing for What You Cannot Control

There are aspects of a business owner’s or executive’s career that he or she simply cannot control. Changes in ownership, leadership or company performance can alter plans that once appeared reasonably certain. We cannot control those developments for a client. We can determine what they could mean financially.

This can mean understanding spending, examining the resources available and determining what would be required to maintain a comfortable financial life if employment ended sooner than anticipated. Once clients understand that an earlier departure is manageable, they can approach the situation with greater confidence.

The future does not suddenly become predictable. But a client can have a much clearer understanding of their ability to handle it.

Questions We Often Hear

What should I consider if my career may end earlier than I expected?

Understanding what your household spends is an important starting point. From there, we can look at the resources available and determine what would be required to support your financial life if employment income ended.

Why is spending such an important part of the conversation?

Strong earnings can support a lifestyle without requiring someone to pay close attention to every expense. If those earnings may stop, the amount required to maintain that lifestyle becomes much more important to understand.

What can planning accomplish when the decision is outside my control?

It can help you understand what different outcomes would mean for you and your family. You may have little control over a company’s decisions, but having a clear picture of your own financial position can help you determine how you would respond if circumstances change.

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Investment advisory services offered through Granite Islands Private Wealth, LLC, a registered investment advisor with the U.S. Securities and Exchange Commission. This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor. The information contained may have been compiled from third-party sources and is believed to be reliable.