From the January 2007 issue of Investment Advisor • Subscribe!

Delaying Gratification

Sometimes the issues of when and how to retire affect more than a husband and wife. Take this story, for instance:

Q: The niece of a client of mine had planned to earn a law degree after putting her husband through graduate school. She has just learned that he is divorcing her. My client has decided to postpone her own retirement in order to pay for law school for her niece, who has no other family. The niece doesn't want her to make this sacrifice. How can I help resolve this situation?

A: I would invite them both to your office to discuss the situation. First of all, find out how much of a sacrifice is really involved. Was your client itching to retire, or is this a welcome excuse to keep working?

Are there other ways to help the niece come up with the money? What will happen if she later decides she doesn't care for law school after all, or isn't emotionally or academically up to the mark? Will her aunt feel resentful?

If your client truly desires to do this and it won't be a major hardship, the next step is to help her niece transform her guilt into gratitude and accept this gift more gracefully. But first, walk through "what-if" scenarios like these to help her and her aunt determine the best way to proceed.

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