How do you approach a task you’ve never done before?
Most people move through a research, read, and repeat cycle. While you can glean a lot from blogs, videos, and books, there’s no real substitute for personalized help from a professional, especially when it’s something really important.
Think about it like this, if a pipe burst in your basement are you going to sift through Youtube videos for a DIY solution, or are you going to call in a professional?
You can also apply this model to the tax code. Even though it’s very possible to file taxes on your own, those with complex tax needs can benefit from the expertise of a tax professional to help them take advantage of all their available opportunities without missing a step.
Retirement functions in a similar fashion.
Retirement is an exciting journey, but like all journeys, there are twists, turns, hills, and valleys peppered along the way. Many people benefit from a guide to enhance the experience and help them create a roadmap that works best for them.
Why should you consider working with a financial advisor in retirement? Let’s take a look at four ways an advisor can help you build a retirement plan you love.
Enhance your retirement strategy.
Retirement is far from one-size-fits-all. There are so many moving pieces that should be customized to you and your needs. A retirement advisor is steeped day in and day out in the intricate challenges retirees face today.
Working with an advisor can help you figure out how all of these disparate pieces function individually and together. Below are just a few areas where your advisor can help you build a financial strategy for your golden years.
Income planning
An advisor can assist you with building an income plan that supports your vision for retirement. This includes understanding your income channels (Social Security, pension, retirement accounts, RMDs, part-time work, other investments) and creating a plan for the most efficient way to use them. A significant part of income planning is positioning yourself (and your investments) to withstand inflation. If not considered early and often, inflation could present a problem over time.
Your advisor can also help you build and test out a retirement budget. This includes everything from housing to entertainment to travel to health costs to taxes and more. Your spending needs will shift as you move through retirement. Many retirees end up spending much more in the first few years, with to-do lists and projects a mile long. Your advisor can help you make a plan to use your resources effectively, so you aren’t as likely to overspend early on.
If you find there is a disconnect between your lifestyle wants and your savings, your advisor can help you figure out ways to make up the deficits and present strategies to consider moving forward.
Tax planning
Taxes aren’t just indicative of spring-time madness. Instead, taxes touch every aspect of your financial life. By proactively implementing tax-efficient strategies throughout the year, your advisor can help you develop habits that optimize your tax situation.
Tax planning takes a more holistic and comprehensive approach to your taxes. From asset allocation to asset location to withdrawal strategies, to charitable giving opportunities, your advisor can help you make the most of your tax opportunities.
Investment planning
Too often, people think that once they retire, their time in the market is done, but that’s not how we do it at TFS. We encourage retirees to continue investing throughout their golden years. While their strategy may need to shift to accommodate a more conservative risk tolerance and allocation, goals, and time horizon, staying invested remains an important part of their retirement plan.
Maintaining a healthy portfolio in retirement helps protect your assets against inflation and works to support your lifestyle as you age.
Health planning
Healthcare is among the most costly line items on a retiree’s budget. Fidelity estimates that the average 65-year-old couple will spend $295,000 on medical costs throughout retirement excluding long-term care, making your health an important piece of the retirement puzzle.
An advisor can help guide you through the Medicare process, helping you decide the type of coverage that’s best for you and even setting you up with a trusted insurance partner to obtain the coverage.
Your advisor can also do a risk management check to make sure that you have an appropriate level of insurance for your needs.
Another important piece of health planning is building a steady emergency fund. Many people need to use emergency money on health-related expenses, and an advisor can help you make a plan to build a reserve that works for you.
Estate planning
Estate planning is another significant component of your retirement strategy. Your advisor can help you explore different options for your plan. They can also facilitate conversations with your estate planning attorney to ensure that your goals and wishes are accurately reflected in the legal documents.
As you can see, a retirement advisor plays a vital role in developing your retirement plan. Given the weight and substance that an advisor can have on your financial future, it’s essential that you work with an advisor that is truly committed to furthering your goals, putting your needs above their own. Before committing to an advisor, do some due diligence by looking them up on BrokerCheck, conducting meaningful interviews, and ensuring that their methods and practice is set up to support your goals.
Hone in on your goals and values.
A retirement advisor can help you marry your personal and financial goals. A disconnect between the two can lead to engaging in financial habits that don’t further your greater vision and desires for your life. Together, you and your advisor will be able to delve deeper into the following questions.
- What are your core values?
- What goals have you set for your retirement, and how do you plan to reach them?
- When do you check-in on your progress?
- Are your goals and finances aligned?
- Are there ways you can shift your financial habits to better reflect your goals and values?
These are deep questions that encourage introspection, exploration, and planning, allowing you to meld the personal and financial aspects of your life. We can help you discover and prioritize your goals efficiently and effectively.
Figuring out strategies for our clients to better align their money with their values is our sweet spot. We love working with people to help create continuity and harmony between their finances and their life.
When it comes to retirement, money and life are deeply intertwined. Your ideal lifestyle impacts your budget, withdrawal strategy, work plan, investments, taxes, and more. Having a professional to help illustrate these connections and build a plan to connect those dots can prove to be invaluable as you move through your golden years.
Navigate life transitions.
Retirement, like any other stage of life, is a transition—one that comes with many changes, challenges, and opportunities. Working with an advisor can help make those transitions more palatable. This could be anything from downsizing your house to establishing your estate plan to managing the loss of a spouse.
These changes can be particularly difficult from a financial and personal perspective because it’s your first time going through them. You don’t have prior experience to draw from and you might be the first one in your family to undergo your situation.
The advantage of working with an advisor, especially someone well-versed in your needs, is that they have built their career on supporting clients as they manage these transitions. When you might be stuck on what comes next, they can help guide you and layout a feasible path forward.
This support becomes especially critical for those who have lost a spouse and are taking the lead on their finances for the first time. There are so many financial and legal to-dos that it can become incredibly overwhelming, especially in the troughs of grief. Your financial advisor could be a stable and comforting presence, helping you take control of your finances one step at a time.
Your advisor can also help coordinate with other members of your professional team such as your CPA and estate planning attorney. A coordinated financial plan is critical to creating continuity and efficiency.
Working with an advisor throughout retirement gives you another set of eyes on your plan, providing ideas, support, and strategies along the way.
Make an impact with your money.
Many people have a goal to make an impact in the world. Working with an advisor can help you use your money to make an impact on yourself, your family, the community, and the world around you.
Your money becomes more impactful when it’s connected to your goals, values, and vision. Each dollar you use matters and makes a difference. This mindset shifts the way you approach spending, saving, investing, and donating your money.
Let’s say an important goal for you is to help support your grandchild’s education. You can use your resources in several ways to help bring that goal to fruition. Perhaps you open a 529 account for them or donate to a pre-existing account. Those contributions might become a regular part of your monthly spending because that’s what’s most important to you.
Charitable giving is another great avenue to demonstrate the impact money can have on causes and organizations and the people they serve. An advisor can help you give with intention and make giving a regular part of your financial plan. There are several tax-conscious ways to donate throughout the year to make giving purposeful instead of an after-thought.
Your charitable tendencies can also make their way into your estate plan through a charitable remainder trust or other avenues. Your advisor can help you explore the options that will work best for you and coordinate that plan with your CPA and estate planning attorney to make sure everyone is aligned with your vision.
Retirement your way.
A financial advisor can be an incredible resource throughout all stages of retirement. From managing your financial strategy to goal-setting to transitions to legacy planning and more, your advisor will help you make each moment of your retirement life centered on your vision and dreams.
Working with retirees is gratifying and special work. Walking alongside our clients as we help them reach their dreams and guide them through times of change is a wonderful reward. If you’re looking for a professional team to help you build your retirement plan, get in touch with us today. We’d love to serve you.
FSC Securities Corp does not provide tax or legal advice
