Questions To Ask Financial Advisor About Retirement


What Licenses And Certifications Do You Have

Questions to Ask Your Financial Advisor | Retirement Investment Tips

Personal financial advisors can have a range of licenses and certifications. Those credentials tell you what type of education and training the advisor has. Credentials also help you with background checks you can contact the credentialing organization to verify the advisor is still certified.

For a detailed review of advisor licenses and certifications, see What Can A Financial Advisor Do For Me?

How Will I Fund My Lifestyle Once I Have Retired

Similar to how location, location, location! is for real estate, its all about the income when it comes to retirement! You want to have a clear idea of how much your lifestyle will cost you each month in retirement.

Also, dont forget about those long-held goals that you might have dreamed of for a long time: visiting foreign lands, traveling nationwide in an RV, contributing to causes you care about in a meaningful way, or embarking on a second-act career, to name a few possibilities. The price tag for these less-frequent expenditures should be accounted for in your retirement plan as well.

Once you have a clearer idea of what these spending numbers look like, its a matter of determining where the money will be coming from. Here are a few steering questions to help guide you.

How much money will your portfolio be able to generate for your lifestyle and these other dreams? Do you have any other assets that you can tap for cash-flow? What sort of tax status do these assets have?

Your financial advisor can walk you through these questions and different scenarios for your situation.

Essential Questions To Ask Your Financial Advisor About Retirement

As you get closer to retirement, it becomes increasingly important to have in-depth conversations with your financial planner about the years ahead. Not only should you talk about different financial scenarios, but you should also speak honestly about your retirement goals and any concerns that may be on your mind.

Open the conversation with your personal financial advisor about retirement by asking the questions below. Start with a few big picture questions, then move onto more details about your goals, cash flow, taxes, and more.

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What Can You Do To Help Me Be Ready For Major Financial Risks In Retirement

Your financial advisor will be familiar with major types of risks that can affect your financial portfolio during retirement. Bear markets, low interest rates, and other adverse market conditions should be considered before committing to a specific financial plan during retirement.

Among other resources, your financial advisor can have different tools to stress-test various strategies in different economic conditions to see how they hold up. This can be a useful way to see how they can help you manage and control for different risks in retirement.

For example, should interest rates start to climb, then you may want to consider moving some money out of fixed-interest assets into new assets that pay a higher rate. Your financial advisor can discuss these possibilities with you.

What Do You Like About Your Job

Top 10 Questions You Should Ask Your Retirement Financial Advisor ...

No matter what type of professional you’re looking for, it helps to find someone who likes their joband who isn’t just punching a clock.

Ideally, your financial adviser will enjoy assisting people and have a passion for all things finance. They should be happy to help you budget, pay down debt, manage healthcare costs, build wealth, and ensure that you have enough income in retirement.

Body language says a lot. Is the adviser making eye contact with you, smiling, and using hand gestures while speaking? That’s good. Or, are they slumped in a chair, distracted, and staring at their phone? That’s a red flag.

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Can I Retire During A Recession

This question is on the minds of many individuals as we experience unprecedented uncertainty in both the economy and our daily lives due to the COVID-19 pandemic. No matter whats happening in the current economy as you approach your retirement, its always smart to discuss a contingency plan with your financial planner.

As you discuss these concerns with your financial planning team, the outcome should always be a financial plan based on conservative assumptions. Your financial planner should also help you create a withdrawal plan that applies to multiple scenarios, both good and bad. Be wary of anyone who overpromises stock returns or timing the market. No financial professional can predict the future.

In addition to preparing for a potential recession in the future, a reputable financial advisor also helps you explore options in the midst of a downturn. You may consider tactics like using accumulating and accessing excess cash, claiming Social Security early, or using tax loss harvesting strategies. Responses such as these may illustrate that your financial planner has experience with and incorporates recession strategies as part of their retirement planning process.

How Will Your Investing Strategy Affect My Tax Bill

If your advisor is managing your money in a taxable account, you’ll pay taxes annually on realized gains, dividends, and interest. Your earnings will cover those taxes but pulling money from your investment account reduces your future wealth potential.

Most advisors will be mindful of this. Make sure yours is. Ideally, the advisor follows a tax-efficient investing strategy and estimates tax implications prior to making recommendations.

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What Happens To My Retirement Savings And Estate Assets When I Die

It is vital to understand what will happen to your retirement savings and estate assets when you are not around. Ideally, for this purpose, the retirement advisor will guide you on how to list down nominees for all your retirement accounts and, most importantly, create a holistic estate plan. The expert can help you prepare a will, deploy profitable investment tools, streamline foreign assets, review the value of assets, keep a tab on your estate taxes and penalties. If you want to assign a power of attorney or set up a trust, you can ask your financial advisor to guide you in this aspect too.

Questions To Ask A Fiduciary Financial Planner

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Here are some questions to ask a fiduciary financial planner are

10. Is my financial advisor a fiduciary?

Some financial advisors are registered investment advisors or RIA. They are held to a higher standard to protect the investors. Fiduciary advisors need to put their clients interests at all times.

11. What is a fiduciary?

A fiduciary is a person or legal entity , that has the power to act on behalf of a person in total trust, good faith, and honesty. A fiduciary advisor can act buy or sell securities on your behalf without requiring your express permission before each trade. Fiduciary is held to a higher standard than non-fiduciary advisors.

12. What is the difference between fiduciary advisors and financial planners?

Fiduciary advisors are held to a higher standard of accountability. Financial planners can sell investments that are suitable to the clients.

13. What are fiduciary financial fees?

Fiduciary financial advisors are fee-only advisors. They do not charge a commission on the sale of financial products. They may charge a flat fee or hourly rate. They may charge a percentage based on assets under management.

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What Professional Credentials Do You Have

Each financial advisor will have his or her special qualifications. Look for respected industry designations, such as Certified Financial Planner or Chartered Financial Analyst .

To sell or recommend specific products, the advisor may be required to pass licensing exams from the Financial Industry Regulatory Authority, more commonly known as FINRA. He or she likely also needs to be registered with the state.

Are You Aligned With The Right Institutional Partners

McKinsey has written that RIAs are a profitable and growing segment in the U.S. wealth management industry. As a result, theres a high degree of consolidation taking place.

With 15 retail-oriented RIAs eclipsing $20 billion in client assets in 2020, up from eight firms in 2016, writes McKinsey. The average size for the ten largest RIAs grew 2.4 times during this period.

This trend means there is more fragmentation at the bottom, which is the cohort that youll be a part of if youre starting a new firm. As a result, its easy to feel like a small fish in a big bond you may be worried about your unique practices ability to stand out as a result.

The solution to the challenge of feeling like a small fish is to partner up with an ecosystem of providers that include custodians, technology, and asset managers. In addition to providing core infrastructure, these institutional partners may also provide referral networks to new clients, built-in communities, and other support systems to actively scale up your practice.

In case its helpful, Michael Kitces has put together a helpful resource for choosing the right custodian. This guide from Fiduciary Trust may also be helpful as you navigate your decision.

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Do I Have Enough Money To Have Some Fun

A successful retirement isnt always about the tangibles. For many, its a time to realize dreams of travel and other experiences, but spending too frugally can get in the way.

Often clients are overly conservative for fear of running out of money, but in the process they shortchange the retirement experience, says Kevin Lum, a CFP in Los Angeles. By the time they realize their abundance, theyre too old to spend it.

Talk to your advisor about your big-ticket wishes and whether you have enough money to splash out a little before you settle into quieter spending.

Actual retirement spending looks more like a smile than a straight line, Lum says, with more spending at the beginning on things like travel and more spending at the end on long-term care needs.

Im not saying people should spend irrationally, Lum says. But thinking about retirement spending as a fixed calculation that doesnt change across the retirement life isnt a smart idea.

This article was written by NerdWallet and was originally published by The Associated Press.

About the author:Kate Ashford is a certified senior advisor ® and personal finance writer at NerdWallet specializing in Medicare and retirement topics.Read more

Question #: What Is Your Approach To Financial Planning

Pin on Retirement

Ask the financial planner about the type of clients and financial situations they typically like to work with. Some planners prefer to develop one plan by bringing together all of your financial goals. Others provide advice on specific areas as needed. Make sure the planners viewpoint on investing is not too cautious or overly aggressive for you. Some planners require you to have a certain net worth before offering services. Find out if the planner will carry out the financial recommendations developed for you or refer you to others who will do so.

At Compass Financial, we have no minimum net worth requirements. We believe in helping you plan your financial future regardless of your income level or financial goals. Its not important to us whether you have a dollar to your name or millions in assets. Our Des Moines financial planners goal is to create a safe place to share questions and concerns, and we offer patient listening and thoughtful guidance.

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What Are My All

In addition to paying the advisor, youll face other fees and you’ll want to know what they are. Fees can decimate your savings over time. A NerdWallet analysis found that a 1% mutual-fund fee could cost millennials $590,000 in retirement savings. “You can lose half your net worth without even knowing it,” Finn says. “You want to be vigilant.”

Top 3 Questions To Ask Your Advisor Before You Retire

If youre preparing to retire, the quality of the relationship you have with your advising team could determine how successful your retirement journey is.

Fact Checked by

If youre preparing to retire, the quality of the relationship you have with your advising team could determine how successful your retirement journey is. They will be navigating the next 30 years of lifes changes with you, ensuring you retire the way youve envisioned. But finding quality advice can be difficult because we are inundated with opinions, ideas, and financial advice from every corner. So how do you know youve made the right choice with your advisor?

Ask them good questions. Were going to equip you with some of the most important questions our clients have asked us before they have retired. Wed recommend that you ask these questions too, as they can help you determine if you are working with the right advisor.

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Take This Quiz To See If You Can Retire Early

Do you know if you can retire early? One of the best ways to find out is by speaking with a financial advisor. With the right moves and a little work, you could potentially retire years earlier.

But theres one problem.

Where do you even find a financial advisor? And how do you know you can trust them?

Our advice: Take this quiz from SmartAsset. In just a few short questions, it can help you find qualified vetted financial advisors who serve your area based on their cost and specialty.

You even earn 3 free consultations with each of your matches, so you can compare them1 and be fully prepared to pick a financial advisor thats right for you.

I Get A Pension What Happens If My Former Employer Goes Bankrupt

Retiring? You HAVE to ask your financial advisor these questions

Youre relying on income, but the world is changing and some businesses may have trouble meeting their obligations. Fortunately, many retirees are protected by the Pension Benefit Guaranty Corporation, an agency of the U.S. government.

The details are complicated, but if your employer goes under, you might still receive pension income, up to certain limits. For 2021, the maximum monthly benefit for a 65-year-old was $6,034 per month. If your pension is higher than that, you might experience an unfortunate reduction. Something is better than nothing, but losing pension income can be extremely painful.

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Question #: How Will I Pay For Your Financial Services

As part of your agreement, the financial professional should clearly tell you in writing how they will be paid for the services to be provided. Financial professionals can be paid in several ways

  • A salary paid by the company for which the financial professional works. The financial professional’s employer receives payment from you or others, either in fees or commissions, in order to pay the financial professional’s salary.
  • Appointment fees based on an hourly rate, a flat rate or a percentage of your assets and/or income.
  • Commissions paid by the client for investments sold to you to carry out the financial planning recommendations.
  • A combination of fees and commissions. In this situation, advisors charge fees for the amount of work done to develop financial planning recommendations, and they also receive commissions from any products sold. In addition, some planners may offset some portion of the fees you pay if they receive commissions for carrying out their recommendations.
  • A combination of flat hourly fees and percentage fees. For example, Compass Financial charges a flat hourly rate for financial planning services. These clients pay the same hourly rate no matter their income level. Our advisory investment accounts charge a percentage fee of the assets under management .

Average Financial Advisor Returns

27. What are the benefits of working with a financial advisor?

The financial advisor can improve your portfolio performance by 1.5% to 4% in the long term. The financial advisor role is not limited to money management, but they can help with financial planning while you pursue your other goals. They not only can help you reach long-term and short-term financial goals but also provide holistic financial planning like estate planning, family support, health care, insurance, and charity.

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Important Questions You Should Be Asking Your Financial Advisor

To get the most value from your financial advisor, you must ask the right questions.

Pose strategic questions to prospective advisors and you can quickly weed out the pros who don’t fit your needs. During financial and retirement planning sessions, you can lean on pointed queries to reveal assumptions that should be refined. And in your annual reviews, targeted questions can uncover whats really working in your financial plan.

Here are 16 key questions to ask a financial advisor in the first interview, during retirement planning sessions, and in your year-end financial reviews.

Types Of Financial Planners & Advisors

Best Financial Advice for Retirement

Not all financial planners and advisors are the same, and there are many different types of financial planners. Some specialize in one particular area, like retirement planning, and some have experience in a broad variety of areas. When it comes to the distinction between financial planners and financial advisors, there is a lot of overlap. Both financial planners and financial advisors can help you with strategies for pursuing your financial goals, but they may favor different techniques or hold different certifications.

The fee structure for financial planners and advisors can vary. Some financial planning companies, like Compass Financial, use an hourly rate. This hourly rate doesnt change depending on income or wealth. Other advisors may charge an hourly rate or a percentage of annual income or a percentage of the total wealth being managed. When we manage advisory investment accounts for our clients, they pay a percentage fee according to the assets under management.

A great way to figure out how to choose a financial advisor is to explore different types of financial planners and advisors. Do your research and look around online. Ask for referrals from friends, family members or colleagues. At Compass Financial Services, we offer free consultation appointments where you can use these questions to find out if it would be a fruitful partnership.

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