How Do You Tailor Retirement Planning for a Client With An Atypical Career Path?
Navigating the complexities of retirement planning for those with unconventional career trajectories demands a specialized approach. This article distills expert insights to chart a course through the intricacies of varied income streams and the necessity for adaptable strategies. Readers will discover how to craft a retirement plan that is as unique as their non-linear professional journey.
- Look at All Income Sources
- Create a Flexible Retirement Plan
- Analyze Irregular Income Patterns
- Adjust Plans as Circumstances Change
- Incorporate Flexible Strategies
- Understand Unique Income Rhythms
Look at All Income Sources
When evaluating retirement planning options for a client with an atypical career path, it's important to look at all income sources and what available savings and benefit options are available to them. Often times for an entrepreneur or freelance worker, retirement saving will fall solely on them without a company match in a 401(k) plan or additional funding into an HSA that many companies now offer. So we look at utilizing a SEP IRA or Solo 401(k) for those clients and then strategizing for how to maximize those contributions and deposits to add more in higher income years and try to be consistent in leaner years. For clients over 50, catch-up contributions can help add more to retirement planning and in 2025 people aged 60-63 can add $11,250 in catch-up contributions, an increase from $7,500.
Create a Flexible Retirement Plan
A client I recently worked with spent much of their career as freelancers, moving between industries with fluctuating income levels and inconsistent retirement contributions. I created a retirement plan centered on flexibility and stability to address their unique situation. The focus shifted to working with IRAs and 401(k)s lying idle; this consolidation's objective was to minimize management costs. Once that was done, I set up my plan to save the maximum in those years when my income was high while keeping a small emergency cash to cater for certain market turbulences or shortfalls in income. A combination of fixed and growth investments was also added to obtain safety and growth in the long term. Although they did not have such an ordinary profession, this particular way of planning put this client at ease about his retirement. Consolidation, flexibility, and utilization of the peak earnings phase are fundamental for anybody in an almost identical situation.
Analyze Irregular Income Patterns
Drawing from my transition from mortgage lending to founding Premier Staff, I understand that atypical career paths require customized financial planning approaches. Through building our company from a $4,000 investment to serving luxury clients like Ferrari and Louis Vuitton, I've learned the importance of analyzing irregular income patterns and identifying unique growth opportunities.
Our success in implementing AI solutions that reduced operational costs while maintaining premium service standards demonstrates how innovation can create unexpected financial opportunities. This experience informs my approach to retirement planning, emphasizing the need to consider both traditional investment vehicles and entrepreneurial growth potential.
The key lies in developing flexible strategies that can adapt to changing career trajectories while building long-term stability. Our achievement of consistent million-dollar revenue years while maintaining service excellence shows how unconventional paths can lead to substantial financial success when properly structured.
Adjust Plans as Circumstances Change
Financial planning is a journey, not a destination. All financial plans need to be flexible and adjusted as circumstances change. Changing circumstances include income, expenses, goals, time horizon, liquidity needs, tax and other law changes, etc. Investors with atypical careers need to continually plug in the best information and forecasts they have available to produce the best plan at any given time, then adjust and recalculate as new and more information comes to light. It would likely be beneficial for most investors to use conservative estimates and calculation methods in an effort to meet long term needs.
Incorporate Flexible Strategies
As someone with over 40 years of experience in law, CPA practice, and once a Series 6 and 7 Investment Advisor, I focus on understanding each client's unique career journey when tailoring retirement plans. For those with atypical careers, such as small business owners, it's crucial to incorporate flexible strategies that align with their fluctuating incomes and business lifecycle.
One aspect I emphasize is leveraging tax efficiencies due to my background in taxation from working at Arthur Andersen. For instance, implementing tax-deferred savings vehicles can provide immediate capital relief, allowing for reinvestment into the business or securing income during slow periods. These strategies ensure financial stability throughout the varied phases of their careers.
I also encourage utilizing advanced estate planning techniques, something I've honed by assisting clients in structuring wills and trusts to maximize legacies while minimizing tax obligations. A client once reinvested proceeds from a business sale into a living trust, ensuring a steady income stream for retirement while maintaining asset privacy and control. This approach illustrates how thoughtful planning can bridge unconventional careers with secure retirement outcomes.
Understand Unique Income Rhythms
Personally, I believe understanding the unique rhythms of their income and career choices is essential. For example, I worked with a freelance graphic designer who transitioned into consulting mid-career. Their sporadic income and irregular savings patterns required a bespoke approach, blending flexibility with stability.
