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- If you’ve been retired for less than 10 years, it might be a good idea to hire a retirement advisor.
- Retirement advisors can help you improve your goals, develop income reduction strategies, and more.
- Above all, look for a retirement advisor who is your fiduciary. They hold high ethical and legal standards to ensure that your needs are met before their own.
A retirement advisor, as you might have guessed, is a financial expert who specializes in retirement planning. Life-changing events such as getting married, having a baby, or paying off debt often require the assistance of a financial advisor, and retirement is no exception.
Retirement advisors have extensive knowledge of the investment market, workplace retirement plans, pensions and social security. Advisors are equipped to help you create strategies that make the most of your nest eggs.
What is a financial advisor?
A financial planning advisor is a money expert who helps clients achieve their financial goals. Through expert advice, clients can receive guidance on a variety of financial situations, including building and protecting their assets. Advisors may also advise clients on financial products, tax incentives and insurance options.
It’s important to note that not all financial advisors are the same. There are three main types of financial advisors:
- Traditional Financial Advisor: Advisors who can provide personalized advice and product recommendations based on client needs and goals. These advisors are often certified financial planners (CFPs), registered investment advisors (RIAs), brokers, and wealth managers.
- Online financial planning services: Automated services that often assist people in budgeting, portfolio construction, investing, and goal setting.
- Robo-advisor: A digital advisor that gives advice (usually investment recommendations) based on customer information and computer algorithms. The best robo-advisors offer low fees, various portfolio options, account flexibility, and accessible customer service.
The services your financial advisor provides will depend on the type of financial advisor you have. The most common services offered by advisors and planners are investments, mortgages, budgeting, tax and real estate planning, portfolio construction, insurance, and retirement.
Should I Hire a Retirement Advisor?
If retirement is the most important financial goal on your horizon, you can benefit from working with an advisor who focuses on the idiosyncratic aspects of your financial planning. If you’re feeling overwhelmed or confused, an advisor can help you clarify, organize, and stay on track with your savings goals.
If you’ve been out of full-time work for less than 10 years, you might consider working with a retirement planning advisor, but if you’re in your 20s or 30s and are approaching college, , you probably don’t need it yet. Give money or buy a house than retire.
Here’s what a Retirement Financial Advisor can help you with:
- Calculate exactly how much money you need in your retirement account on your retirement date to meet your annual income needs
- Explain the pros and cons of different types of retirement accounts or products and which one best suits your needs
- Choose the right mix of stocks and bonds to suit your risk tolerance and time horizon
- Readjusting investments when markets change
- social security claim
- plan for retirement income
- Re-evaluate goals as needed
- minimize taxes
- Planning for long-term care and medical expenses
- Execution of Alternative Scenarios and Development of Plan B
How to choose a financial advisor
Not all financial advisors are created equal, and not all offer the same expertise or areas of expertise. A retirement advisor is a financial advisor who specializes in retirement planning. Not all financial advisors specialize in retirement planning. In fact, there are even advisors who specialize in specific demographics and occupations. So be sure to do your homework.
It is also in your best interest to choose a fiduciary financial advisor (a.k.a. an advisor who is legally obligated to put the client’s best interests above your own).
Preferred payment method and total amount is another important factor to consider when looking for an advisor. Financial advisors may charge an hourly, flat fee, or retainer for their services. Some advisors charge a fee (which can create a conflict of interest) or a percentage of total assets.
You can also find a financial advisor in your area. To get started, start by asking friends, family and colleagues for recommendations. You can cross-check your name with BrokerCheck.com and the US Securities and Exchange Commission (SEC).
Online retirement advisors are available by phone or video if you don’t want to meet someone in person. Robo-advisors are often the cheapest option for building and managing investment portfolios. However, it is typically not available for other services such as budgeting and retirement planning.
‘Trustee’ is the most important title to look for
While there are dozens of professional certifications, designations, and certifications that advisors can obtain to demonstrate their expertise in retirement planning, the most important title to look for when looking for a retirement advisor is “trustee.”
Trustees are legally and ethically obligated to make decisions that are best for you and your money, while putting their own interests first. In addition, fiduciaries or fee-only advisors are completely transparent about how fees are paid and whether there are any potential conflicts of interest.
Most fee-only advisors charge a fee of $100 to $300 per hour or 0.50% to 2% of your total investment portfolio on assets under management (AUM). Alternatively, we may charge a single flat fee to create an all-inclusive plan.
Consulting a financial planner is often expensive. Many financial advisors charge an hourly rate (average $120-$300 per hour), flat fee (average $2,000-$7,500 per year), per plan fee ($1,000-$3,000), or AUM (0.59% of client 1.18% from annual portfolio).
You may also have to pay an additional account management fee (usually 1% to 2% of the portfolio value).
If you invest in a particular product or fund, a non-trusted advisor may be paid a commission or referral fee, as long as it is an investment that is “appropriate” to your financial goals. Some of these advisors may claim that they are making their recommendations in the best interests of our clients, but without formal commitment, we cannot be sure.