By Jacqueline G. Goodwin, Ed.D.
The last thing most people want to worry about after they retire is money. In fact, a recent survey found that two-thirds of Americans would rather discuss their weight than their finances. Having skilled, trustworthy financial advisors and planners to call on can make all the difference. They can help clients understand and prepare for the difference between planning for retirement and actually being retired.
Financial advisors can be great when you are confused, emotional or simply ignorant of various wealth-management topics. Add in the fact that a majority of people can’t see far enough into the future to imagine their retirement, much less plan for it, professional advice can be very handy. A qualified advisor will ask you a lot of questions—some of them uncomfortable—in order to get the full picture of where you want to take your life.
Once all of the details are in hand, he or she can put together a plan and offer you advice on investments, retirement planning, estate planning, tax liability, and your kids’ college education. The breadth of the advisor’s knowledge can make a lot of your difficult decisions easier.
A financial advisor is your planning partner. Let’s say you want to retire in 20 years or send your child to a private university in 10 years. To accomplish your goals, you may need a skilled professional with the right licenses to help make these plans a reality, and that’s where a financial advisor comes in.
Together, you and your advisor will cover many topics, including the amount of money you should save, the types of accounts you need, the kinds of insurance you should have (including long-term care, term life, and disability) and estate and tax planning.
The financial advisor is also an educator. Part of the advisor’s task is to help you understand what is involved in meeting your future goals. The education process may include detailed help with financial topics. At the beginning of your relationship, those topics could be budgeting and saving. As you advance in your knowledge, the advisor will assist you in understanding complex investment, insurance, and tax matters.
“Planning for retirement involves accumulating assets and investments where actually being retired revolves more around your lifestyle during retirement and how to pay for it,” says John A. Obrock, certified public accountant at Wildeman and Obrock. “Creating a retirement budget and a road map is essential to enjoying your retirement years and making sure you live within your means and that your assets last.”
Financial planning for people who are retired or very close to retirement is different than other financial planning because it allows you to plan with fewer unknown, for better or worse. You are no longer dreaming about how much money you “might” earn at your job or how much money your investments “might” earn for you. You are working with the money you have on hand and figuring out how to use it to live the retired life you want to have. Most folks will likely read lots of advice about timing their retirement and ways to manage their income. Still, one thing to remember is that there is no one-size-fits-all solution.
Working with a financial advisor can help you design a solution tailored to your needs and income. Ideally, start planning for retirement as early as possible.
“My firm helps to plan tax implications to minimize taxes both prior to and after retirement,” says Sarah Coy owner of SKC Accounting. “Many clients don’t understand the complexities of different retirement accounts and the liabilities that potentially occur. We work collaboratively with financial advisors to maximize your potential return while minimizing the amount of tax you owe over time.”
Doug Charney, a certified fund specialist at the Charney Investment Group says, “When we first start working with a new client we always do a free financial plan that looks at their stated goals and how they are currently invested. The plan makes it quite clear if they are in the right place for their retirement that they hope to have. We then develop a plan to help our clients achieve their investment goals. It’s all a part of our process we call the ‘Bridge Process.’
“Our philosophy is simple. We want to get to know you in order to help you make the best decisions possible.”
Not all financial advisors have the same level of training or will offer you the same depth of services. When contracting with an advisor, do your own due diligence first and make sure the advisor can meet your financial planning needs. Check out their certifications as well, and be sure you understand, agree with and can afford their fee structure. Also, investigate their regulatory history with Pennsylvania’s state regulatory agency and with FINRA’s BrokerCheck and the SEC’s Investment Advisor Public Disclosure database.
The foundation of any relationship is trust. Obrock, Coy, and Charney all agree that when working with individuals and families on their financial matters, it is of utmost importance that they establish and maintain a level of trust with their clients.
Finally, be aware that finding an advisor who is the right fit for your personality is key to developing a successful, long-term relationship. An advisor can have all the experience, credentials, and success stories in the world, but if you don’t like someone, you won’t enjoy working with them, and your financial plan may suffer as a result.