The obvious answer is spending down principal.  What causes a client to do this though?  In my twenty plus years or working with clients and advisors the common answer is not that people spend with disregard to their assets but that an emergency comes up they have not prepared for.

Overwhelmingly that emergency is medical.  While the uncovered cost of medical expenses can be very large typically that is not the portion to destroy a financial plan.  Typically it is the ongoing care that will wipe out a lifetimes effort in building a nest egg.

Luckily there are a number of potential solutions a client can decide upon to cover this exposure.  It is incumbent upon the advisor to make their clients aware of these choices and help guide them to a decision that is right for them and their family.

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