Coastal 360 and Sovereign Financial use projections to show wealthy retirees they can spend

Alicia Fuller has the conversation more often than she would like: clients arrive at Coastal 360 Capital Advisors, the Naples, Florida firm she founded and runs in partnership with Steward Partners, with a vacation in mind, a portfolio near $20 million, and a question about whether they can afford to go. Her answer, as she told Financial Planning, is that the household could pay for a hundred such trips in a single year. The discipline that built the balance sheet is the discipline now standing in the way of spending it.

Financial Planning frames the problem as one of direction: underspending, not overspending, is the more common failure in Fuller's experience, and even eight-figure households want help getting comfortable with a withdrawal; the outlet points to earlier coverage in which researchers call retiree reluctance to spend a problem. Fuller attributes the reluctance to habit rather than arithmetic—clients who spent a career saving, she says, do not automatically accept that the saving is finished.

Charles Failla works the same problem with arithmetic as principal and founder of Sovereign Financial Group, a Stamford, Connecticut RIA with $1.1 billion in regulatory assets, 4,486 accounts, and 31 employees; a number of his clients, he says, are told outright they should be spending more than they do. The instrument is a cash flow analysis: income on one side, expenditures on the other, and a demonstration that adding a few more trips a year still leaves the portfolio lasting the rest of the client's life.

The case that convinced one couple involved a $150,000 trip around the world, which Failla says they would not have pulled from savings without first seeing how it affected the long term; once he showed them, they became comfortable and booked it.

Fuller structures the spending itself around a set amount of withdrawals budgeted each year, the ceiling that makes a client comfortable, and then builds flexibility on top: if the portfolio has performed well, the household can spend past the baseline on a vacation or a remodeling project without treating the excess as a breach of the plan.

Failla's cash flow work carries a second assignment: the analysis should drive asset allocation and risk levels across shorter and longer time frames, which means the projection is what tells the advisor which dollars belong on which side. A client who can see near-term withdrawals mapped against the whole portfolio is in a better position to tolerate the volatility the long horizon requires.

Sovereign is a $1.1 billion independent and Coastal 360 works in partnership with Steward Partners, but the drill is the same at both, which suggests the obstacle to fixing chronic underspending is not resources but the advisor's willingness to raise the subject directly.

What neither advisor describes is a formula; both put a document in front of the client—a projection that carries the trip inside the plan with the portfolio still solvent at the far end—and let the client's own eyes do the persuading. For a household that has treated every dollar as spoken for, that is a more persuasive argument than any reassurance offered in conversation.

There is an incentive wrinkle worth naming: a practice paid on assets collects the same fee whether a household draws lightly or heavily, so nothing in the revenue line rewards an advisor for pushing the client toward the trip. The argument for spending has to come from the plan and the relationship instead, and that may be why the projection does so much of the work: It is the one artifact in the room that can outrank a lifetime of frugality.

As this publication has argued, the final years of retirement are becoming the advisory battleground, where the constraint is permission to spend more than asset level. Both practices are versions of the same move: get a number in front of the client before the decision, so that the spending carries a document behind it rather than a feeling.

Coverage doesn't say how that permission holds in a down year: a household that has just approved a $150,000 trip has not been tested by a falling portfolio, and whether the spending continues or the frugality returns is what the next drawdown will answer.