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Finding the Right Retirement Advisor for You

Planning, saving and investing for a financially secure retirement can be intimidating — even for financially sophisticated people. There are so many unknowns. How much money do you need to save? How long will your retirement nest egg need to last? What levers can be pulled to improve your lifestyle in retirement?

Fortunately, you don’t have to do it alone. A retirement advisor could help you overcome some common retirement planning pitfalls and navigate a course to a successful retirement.

Want a clear view of your retirement?

What is a Retirement Financial Advisor?

A retirement advisor is a financial planning professional who specializes in helping individuals and couples plan and save for retirement. Retirement advisors usually possesses at least one professional designation, such as Certified Financial Planner (CFP® ), Chartered Financial Analyst (CFA), Chartered Retirement Plans Specialist (CRPS®), Chartered Retirement Planning Counselor (CRPC), Retirement Income Certified Professional (RICP®), or Certified Senior Consultant (CSC).

These designations indicate what kind of training and expertise a retirement advisor possesses, as well as the types of retirement planning services he or she offers. Retirement advisors may work for an advisory firm or operate independently.

Be sure to ask about the investment fees charged by the advisor, since these can eat into your investment returns, as well as account minimums.

What Do Retirement Advisors Do?

Depending on their credentials and particular areas of expertise, retirement advisors can perform a wide range of retirement planning tasks for clients, including the following:

  • Help set long-term financial goals for retirement and devise a plan for reaching them.
  • Identify any gaps or obstacles that could hinder progress toward these goals.
  • Determine which types of retirement plans — such as IRAs, 401(k)s or 403(b)s — are best for reaching these goals and how to maximize the tax benefits of these plans.
  • Devise strategies for meeting healthcare and long-term care expenses during retirement.
  • Help choose an asset allocation strategy that strikes the right balance between risk and reward based on your goals and level of risk tolerance.
  • Plan a portfolio withdrawal strategy that minimizes taxes and helps ensure that the retirement portfolio lasts as long as funds are needed.
  • Plan a Social Security distribution strategy based on your circumstances that maximizes payouts and benefits over the long term.

What to Expect from a Retirement Advisor

The first thing most retirement advisors do when working with new clients is conduct a review of the client’s overall financial situation. For example, do you currently have any retirement accounts and, if so, what are their balances? What other financial assets do you own, such as investment accounts, real estate or collectibles? How much (and what kinds) of debt are you carrying? And what is your annual income?

Based on this analysis, a retirement advisor will work with you to create a customized retirement plan just for you. This plan will provide the blueprint for all the decisions that are made in the future with regard to your retirement financial security.

There are lots of potential benefits to working with a retirement advisor. Perhaps the biggest is that the advisor has specialized experience and expertise when it comes to retirement planning that most people simply don’t have. Advisors also usually possess knowledge and understanding of tax laws and government policy changes that can have a big impact on retirement accounts and overall retirement plans.

In addition, a retirement advisor brings an objective viewpoint to retirement planning, which helps him or her point out potential shortcomings and gaps in the plan and make suggestions for overcoming them. The advisor can also be a calming influence during times of market volatility and help discourage you from making short-term, emotional investing decisions that could damage your long-term returns and financial security.

The biggest drawback to working with a retirement advisor is cost, since professional financial advice doesn’t come for free. Most advisors charge a percentage of the total assets under management (which is known as AUM) or a flat or hourly fee, or they earn commissions on financial products sold.

Ready to Find a Retirement Advisor?

If you believe you could benefit by working with a retirement advisor, consider the following steps.

  1. Do some research and ask friends for recommendations to identify a few advisors who might be a good fit. Then, cross reference those potential advisors or firms against the Finra resource: Broker Check – Find a broker, investment or financial advisor.
  2. Interview each potential advisor, asking them for a formal written proposal including their professional designations and areas of expertise, the range of services they offer, their all-in fee structure (including intrinsic costs of any products used), and their investment strategy and style, as well as audited performance track record.
  3. Perhaps most important, ensure they are a fiduciary. As a fiduciary, an advisor is legally bound to make investment decisions that are in your best interest, not the advisor’s.
  4. Utilize free online financial tools to stay the course. Personal Capital offers a tool called “Retirement Planner,” which allows you to see how likely your current portfolio and retirement plan are to be successful.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Jonathan Lore is a Senior Financial Advisor with Personal Capital. Since 2007, he has been in the financial services industry, working with entrepreneurs, corporate executives, and their families. He has also held a variety of client service roles including comprehensive planning and holistic investment management. Outside the office, Jonathan is an avid basketball fan and enjoys a variety of activities including backpacking, snowboarding, and paddle sports.

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