Admitting you need help is hard. Paying for that help is even harder. And paying to get help saving money … well that seems downright ridiculous to some people.
But I find those who think it’s unnecessary to pay for financial advice usually don’t have a clear idea of what an experienced, knowledgeable adviser can do for them.
Good financial strategizing extends well beyond where and how you invest. Here are three areas where having a trusted adviser on your side can add value to your retirement planning:
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Portfolio construction
This is the nuts and bolts of investing, but it goes much further than buying and selling stocks and other securities. An adviser who is familiar with your goals can put together a plan that will help guide you to and through a successful retirement. They’ll work with you to determine your risk tolerance based on your financial and emotional ability to handle market volatility. They can create a diversified asset allocation that will hold up better in the event of a market downturn, and ensure you have a tax-efficient plan that’s protected against inflation. And they’ll look for investments that best fit your needs at the lowest cost to you.
Wealth management
Your asset allocation will remain critical throughout retirement — you can’t just set it and forget it. As you get closer to retirement, you’ll probably want to take a more conservative approach to the markets, and allocations can drift from their targets over time, posing new risks you might not even be aware of. (In today’s bull market, for example, stocks can easily become a larger percentage of a portfolio mix than planned, making you more vulnerable in a downturn.)
You’ll also need a balanced withdrawal strategy to minimize taxes in retirement. This requires understanding where you will be on a marginal tax level each year, and then gauging the best way to take the money from any tax-deferred accounts (traditional 401(k)s and IRAs) and tax-free accounts (Roth 401(k)s and Roth IRAs). Your financial adviser can help you keep as much of your nest egg as possible.
Behavioral coaching
This is an often-overlooked part of a financial professional’s job — and it’s arguably the most valuable thing your adviser will do for you. That’s because investors tend to get emotional when the market is at extremes, and that can lead to bad decision-making. People get greedy when times are good — taking on more risk than they should. And they get scared when times are bad — selling low or moving everything to cash. Your adviser will listen to your worries, help you differentiate between rumors and reality, and offer moral support as you stick to your plan.
Performance is important. But to make the most of your hard-earned savings, you should be looking beyond returns. Your financial professional can help you minimize taxes and volatility, optimize your income streams and ensure you stay on the road map designed to best reach your retirement goals.
Kim Franke-Folstad contributed to this article.
-
Here's Why I'm Upgrading to the iPhone 17The iPhone 17 is here. Learn what's new, where the best deals are and whether it's worth the switch.
-
September Fed Meeting: Live Updates and CommentaryThe September Fed meeting is a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. will do about interest rates.
-
I'm an Investment Strategist: This Is How the Fed's Next Rate Move Could Impact Your WalletInterest rate cuts might be coming, which could affect everything from your credit card debt to your mortgage. It's smart to prepare now — here's how.
-
I'm a Retirement Planner: These Are Three Common Tax Mistakes You Could Be Making With Your InvestmentsDon't pay more tax on your investments than you need to. You can keep more money in your pocket (or for retirement) by avoiding these three common mistakes.
-
Want to Shave 10 Hours Off Your Workweek? A Startup Expert Shows How AI Can HelpArtificial intelligence is overhauling how companies operate, freeing up entrepreneurs and their workers to skip the menial stuff and get down to business.
-
Four Clever and Tax-Efficient Ways to Ditch Concentrated Stock Holdings, From a Financial PlannerHolding too much of one company's stock can put your financial future at risk. Here are four ways you can strategically unwind such positions without triggering a massive tax bill.
-
Beyond Banking: How Credit Unions Serve Their CommunitiesCredit unions differentiate themselves from traditional banks by operating as member-owned financial cooperatives focused on community support and service rather than shareholder profit.
-
Answers to Every Early Retiree's Questions This Year, From a Wealth AdviserFrom how to retire in a crazy market to how much to withdraw and how to spend without feeling guilty, a financial pro shares the advice he's given this year.
-
The Risks of Forced DST-to-UPREIT Conversions, From a Real Estate ExpertSome new Delaware statutory trust offerings are forcing investors into 721 UPREIT conversions at the end of the hold period, raising concerns about loss of control, limited liquidity, opaque valuations and unexpected tax liabilities.
-
I'm a Financial Adviser: You've Built Your Wealth, Now Make Sure Your Family Keeps ItThe Great Wealth Transfer is well underway, yet too many families aren't ready. Here's how to bridge the generation gap that could threaten your legacy.
