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The transition into retirement brings new financial challenges. With new goals, obstacles, and an enormous shift in priorities, you may feel intimidated when managing your finances. The good news is that you don’t have to tackle it alone.
By working with the right financial experts, you can gain peace of mind, maximize your savings, and better achieve your financial goals.
The Role of Financial Professionals in Retirement Planning
Financial professionals are critical when it comes to retirement planning. This is because they have a great deal of expertise and experience they bring to the table.
These professionals can contribute to your retirement planning in several ways, including aiding you with
- Investment management
- Tax planning
- Estate planning, and
- Risk management
Financial professionals have managed various financial situations and portfolios, so it’s more of a matter of what you’re looking for help with. This brings us to our next point.
Identifying Your Financial Needs and Goals
Before you meet with a financial professional, you should assess your financial situation and define your goals. This way, you can narrow down who and what you want. You can then better communicate to a financial professional precisely what it is you’re looking for, and in turn, they can help you more precisely to achieve your goals.
Some examples of financial needs during retirement might be managing income sources, planning for healthcare expenses, and preserving wealth for future generations.
You might sit down and list financial needs in retirement, then assess which ones you feel you can confidently tackle on your own and which you feel you could use professional help with.
By setting realistic and measurable goals, you will be more in tune with what type of financial professional you want to work with.
Types of Financial Professionals
So what types of financial professionals are out there waiting to help you? There are various experts, as each kind specializes in different aspects and has different training or education, standards, objectives, etc.
Financial Advisors
A financial advisor “helps people create long-term strategies for building wealth and managing risk. They can help you track, manage and balance your investment portfolio. They can also advise on many other financial issues and decisions”.
Remember that “financial advisor” is a broad term; you may want someone with a more specific background or objective to help you with your finances. For example, you may want to hire a wealth manager who deals with a more significant net worth or a financial planner who may be more goals-focused.
CFPs
When it comes to planners, Certified Financial Planners, or CFPS, are a popular type of financial professional to work with. This is because they have a long list of positive attributes associated with their title.
First and foremost, a CFP is a fiduciary. Put simply, this means they have an ethical responsibility to put your needs as a client first and always act in your interests. You can see why this standard in the financial world is precious.
CFPs have also gone through rigorous studying and exams they must pass. Once certified, they must adhere to a specific code of conduct.
CFPs must be upfront with you as a client and often will sign a fiduciary oath stating that they will adhere to strict standards of honesty, integrity, and transparency. Not only this, but they tend towards a more holistic lens of your finances.
A CFP is a great choice for choosing a financial professional.
Estate Planning Attorney
If you’re looking more specifically at plans for your estate and what will happen to your money and assets after you die, you will want to hire a reputable estate planning attorney.
These individuals are specifically trained as lawyers to understand the legalities of everything involved with end-of-life arrangements. This can be anything from document preparation (such as writing and preparing your will), estate taxes, and setting up trusts.
This era of life can come with highly nuanced financial situations, so it is often best to work with such an attorney to have peace of mind when leaving your legacy to your loved ones.
Tax Professionals
You may work with a licensed tax preparer or a Certified Public Accountant (CPA). A licensed tax preparer is trained to aid with relatively “standard” tax situations, and they are typically less expensive to hire than a CPA. They are licensed through the IRS.
A CPA with a more extensive education may tackle more complex tax situations. CPAs may better serve Individuals or businesses looking for a broader array of accounting services beyond tax preparation, like reviewing and compiling financial statements.
Whichever type of professional you choose, you’ll want to be sure that they understand retirement taxes since this will directly affect you during this period of your life.
Insurance Agents
An insurance agent is another financial professional you can add to your money dream team. That’s because these agents or brokers will consult with you to find the right policies for this time in your life.
This is especially important regarding a life insurance policy, which you should address during retirement.
Insurance agents often have a company behind them pushing them to make sales. Use your best judgment to find someone who will truly listen to you, consider your needs, and not rush you into decisions or purchases.
Factors to Consider When Choosing Financial Professionals
When selecting a financial professional to work with, do your research. Be sure that the person and firm you’re hiring is someone with a good reputation, credentials, and plenty of experience. This can often be found through basic internet research, reviews, and their website.
You may even choose someone who a trusted friend or family member uses so that you know you’re working with someone with a proven track record of being helpful and trustworthy.
Interview multiple financial professionals to assess their communication skills, responsiveness, and compatibility if necessary. Remember, they will work for you, possibly for years or decades. They’ll also be handling some of your most delicate information and assets. With that in mind, there’s hardly any concern about being too picky when selecting who you work with.
Questions to Ask Potential Financial Professionals
When you interview these financial professionals, you may ask them various questions.
- Their experience in the field
- What are their fees
- Their investment or personal philosophy when it comes to finances
- Their approach to risk management
- How they prefer to communicate
- Their understanding of retirement-specific challenges and their strategies for addressing them, etc.
Being thorough in your interviews will help you to hone in on the right individuals to work with and save you from possible headaches in the future.
The Right Team For You
Working with the right professionals during your retirement is vital to your financial success. The right professionals can help you achieve financial security and peace of mind and guide you toward achieving your goals.
Don’t rush this decision. Instead, take your time to find the right professionals who align with your goals and values.
Related: 5 Important Retirement Savings Milestones To Reach in Your 50s