Four years ago, Peter Cobb gave up practicing law and moved to New York City to follow his dream. With no job and no apartment, Cobb thought he'd teach and play freelance gigs on his saxophone until he could support himself as a jazz musician.

"I hit 30 and said, practicality be damned," Cobb says.

Despite the seemingly quixotic venture, Cobb did have some grounding. His father, Steven Cobb, a Scottsdale, Ariz., ophthalmologist and now-retired financial planner, advised his son on every aspect of living with a precarious income - from shedding credit card debt to saving on reeds for his instrument. Together, they plotted a budget based around a month-to-month apartment lease, so Cobb knew he would have a few months to start earning before he was forced to live in his parents' basement.

Four years after moving to New York, Cobb is now a part-time graduate student of music at New York University and lives in a group house with other artists. He supports himself as a program officer at the New York Foundation for the Arts, where he helps set up financial boot camp for artists - including an upcoming seminar run by his father on planning for artists.

"And I'm putting away for retirement," the younger Cobb says. "It's not an approach every artist wants to take, but I appreciate that he's given that [guidance] to me. I'm probably better set up, with a better structure in place, than a lot of my contemporaries."

Retirement planning is challenging enough when clients have steady paychecks. But how does an advisor help people whose incomes swing up and down, year after year? When the money is rolling in, how does an advisor keep a client from looting the entire windfall?


Planners who specialize in working with writers, artists, athletes and entrepreneurs preach a consistent mantra of savings, savings, savings. They also help their clients make lifestyle choices that can be maintained for decades and manage client expectations to help avoid the unwise decision that a big paycheck can support a new way of life.

"While retirement savings is important for all, it's particularly important for people with a variable income stream," says Phillips Ruben, a CFP in Newton, Mass., whose clients include writers, artists, teachers and entrepreneurs.

Ruben helps his clients maximize their savings, inject some discipline into their lives and keep spending at bay. Planners who work with this crowd must also understand that there may be years when such clients will not be able to contribute to their retirements, he says. "Money is a secondary consideration in realizing a dream in becoming an artist," he says.

He urges people pursuing their artistic passions to be open to having a regular income - taking teaching jobs, perhaps, or working part-time in family businesses. The goal is to "at least alleviate some financial pressure if there's some regular income coming in."

Entrepreneurs are a special case: Although they tend to be quite accepting of financial risk in their business lives, he says, they are more risk-averse when it comes to investments. "They worked so hard for their money," Ruben says. "I tend to be more conservative in managing the assets they do have, so there are no wild swings in the portfolio."

He suggests to his clients: "Find a sustainable lifestyle that you're comfortable with. Define a reasonable, sustainable lifestyle and stick with that." Living below their means helps "so when times are bad they don't have to ramp down their lifestyle."


John Valleau, a financial planner in Chicago, sees his job working with actors and entrepreneurs as "trying to add structure to their lives." He has a stable of voice-over artists, jingle singers and music producers who find steady work through advertising agencies. Valleau helps them apply the same diligence to their finances.

"To be successful with an uneven income you've got to live below your means, because you have to have more of a cash cushion than an employee," Valleau says. "You may go months at a time before the next job. You may make a ton of money for next five months and nothing for a year."

To create that structure, Valleau, a principal at ShankerValleau Wealth Advisors, asks each of his artists and entrepreneurs to create corporations so that expenses are deducted directly through those entities. He directs his clients to create separate bank accounts for their businesses and pay themselves a monthly salary, rather than just raiding the business account every time cash is needed. "You'd be surprised how many people commingle everything and then it all gets mixed up and you don't have that discipline," he says.

Valleau doesn't use a set number of months to calculate an adequate savings cushion. He just wants one big enough "so they can ride out the gaps and not worry about the money and where it's going to come from."

His clients "can accomplish their goals by finding that disciplined approach," Valleau adds. "At the end of the year, they have a chunk of money. Maybe you make a retirement contribution and put the rest in savings."


Sometimes an advisor's biggest challenge is managing clients who have so much money that they can be a danger to themselves. C. Richard Hearn, president of Starcare, a financial advisory firm in Newport Beach, Calif., worked for years with professional athletes and coaches. He still works with a few, although most of his clients are now disabled people supported by injury settlements. Both types of clients pose the same challenge: people who are grappling with sudden wealth and "may not know what to do with it," Hearn says.

The average time someone stays in the major leagues is five years, Hearn says. Unfortunately, that's the same amount of time that most athletes' money lasts. Few clients recognize the danger until it's too late, however. "They've never seen that much money, so they can't imagine it ever runs out," he says.

And not everyone is a superstar. Peyton Manning might be making $15 million or more yearly, but the Broncos' kicker isn't making that. "You get all these people who can't afford to live like the big stars and yet they try to live that way," Hearn says. "First thing, they go and buy a big house - and then get traded from Oakland to Miami [so] they end up with two houses.

"You're from Arkansas, so mama's got to have a house, because she gave up everything," Hearn says. "Then the posses start forming, all the hangers on - people that hang around you because you're famous and you end up picking up the tabs. And the tabs get bigger and bigger." Inevitably, there will be a dad or cousin who thinks he knows a whole lot about investing. "If that person gets involved, the money can disappear faster."

Hearn enlists the help of players' wives, often making them the financial gatekeepers. He makes sure the athletes get disability insurance. And he uses the most conservative liquid investments.

He also creates an emergency plan. "They can get let go tomorrow," Hearn says. "I want a bunch of money in a short-term Treasury or muni bond fund. Something very liquid and very safe with low volatility." In those, the clients sock away a year or two of living expenses.

He says his job was often reminding the athletes of those obligations. "You have to make that case early and often. Nobody needs to go through money like General Sherman through Georgia," Hearn says. He asks his athletes and their wives to check in every week, but can't compel them. "There's not a way to keep someone from screwing up."


The dominant message for all such clients is to "sock away a lot of money," says Winnie Sun, managing director of Sun Group Wealth, an independent agency in Irvine, Calif.

Many of Sun's clients work in the press, movies and television. "I consider a lot of these people business owners," says Sun, who entered financial planning after years of running her own company, wrangling audiences for live TV shows. "They go from project to project. It's really hard to plan how much they will bring in with how much they are spending." Sun says she helps her clients sock away six to nine months of savings. She tells them, "It doesn't matter how good you are. You can be the director of Shrek. You still need liquidity between projects."

Next, they must control their spending. Sun says her clients "are used to being flown to Europe. They say they need a tuxedo." Sun tells them to "spend like this is the year of your last paycheck." Trim every place you can, she says. Looking at their accounts, she'll offer stern advice: Consider your professional costs, such as your agent's cut. Then reconsider the niceties and "get rid of doggie daycare."

She insists they save for their children's education and invest for their own future. But there are few long-term solutions if the clients don't save now, Sun says.

Education can go a long way in keeping clients focused on the right priorities. Steven Cobb, the musician's father who lives in Arizona, says he's looking forward to training more artists about the importance of Schedule C forms, liability and health insurance, 401(k)s and IRAs through an online course this fall.

The single best piece of advice planners can give entrepreneurs - other than paying off their credit card debt? "To make them aware of the advantages of things offered in retirement planning," Cobb says. "At some point, they are going to have to transition into a different lifestyle."

Suzanne Sataline, a former health care reporter at The Wall Street Journal, is a writer in Brooklyn, N.Y.


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