Retirement Advisors Near Me: Find The Best Retirement Planners in Your Area

As relaxed as the term ‘golden years’ sounds, it can be a bit overwhelming and scary to retire. The transition from being an integral cog of the workforce to living the laidback life of a retiree can be tough on many people. The primary reason for this is the absence of a salary to rely upon. However, this fear can be overcome by simple measures like saving and investing in the right financial tools with robust retirement planning by your side.

Retirement planning refers to planning for your golden years when you will no longer be a part of the workforce. Retirement planning gives you the financial freedom to enjoy your retired years as you wish and live a financially independent life for as long as you live. It helps you build a corpus that can cover essential costs like groceries, electricity, gas, healthcare, etc., discretionary expenses like travel, dining out, shopping, etc., as well as emergency costs like unexpected home repairs, car repairs, and more.

Retirement planning is an essential part of any financial plan and a crucial task that you must undertake regardless of your income, age, net worth, future goals, and family’s needs. Considering the importance and impact of this task on the overall standard and quality of your life, retirement planning is also something that should be done under professional guidance. A retirement advisor can help you draft the perfect retirement plan according to your needs and help you navigate through any financial challenges that you may come across.

This article talks about the importance of retirement planning, why you need a retirement advisor, and how to pick local retirement planners to advise and guide you on your road to financial freedom.

Why is retirement planning important, and how can local retirement planners help?

Retirement planning is not limited to only saving for the future and can help in several other ways too. Some of these have been mentioned below:

It can help you plan your taxes: A lot of people concentrate on building wealth, but they forget to take into account the subsequent tax repercussions of this wealth. Having a high income in retirement can help you cover different types of costs and live a comfortable life. However, it can also increase your tax output and ultimately impact your cash inflow. Hence, it is important to plan well in advance and understand how your retirement income will affect your taxes. For example, if you invest in a traditional Individual Retirement Account (IRA), the contributions will be made from your pre-tax dollars, and your withdrawals in retirement will be taxed. However, if you choose a Roth IRA, your contributions will be taxed, and your withdrawals will be given to you completely tax-free.Retirement planners take into account all such factors and help you pick a product after a careful evaluation of every minute aspect. For instance, the decision to make a choice between a Roth and a traditional IRA will depend on how you foresee your tax output in retirement. If you expect a high tax output in retirement, a Roth IRA would be a more suitable option, as you will not pay any tax on the withdrawals. However, if you anticipate a lower tax output in retirement than you do in the present, a traditional IRA can be more apt. A retirement planner can help you understand such differences and invest according to your individual needs.
It can help you plan your withdrawals: Planning the withdrawals of your retirement accounts is important for a number of reasons. Firstly, the timing of your withdrawals can affect your overall earrings. How and when you take your withdrawals sets the course for the rest of your retirement. For instance, you can start withdrawing the Social Security benefits when you reach the full retirement age. But if you delay this till the age of 70, you can increase your paycheck. Every month you delay collecting your Social Security benefits, you earn a little bit extra. So, if your full retirement age is 62 and you decide to wait to draw your Social Security benefit till 70, the total annual increase in your benefits can amount to an average of 7.4% per year. This can be a significant increase, depending on the number of years you delay collecting your check. A retirement advisor can calculate the best time for you to withdraw your benefits.Secondly, every retirement account will follow a set of rules for withdrawals. For example, you can only start making penalty free withdrawals from a 401(k) account after the age of 59.5. If you withdraw before the age of 59.5, you will have to pay a 10% penalty to the Internal Revenue Services (IRS). But you will also have to withdraw your money mandatorily after a certain age. As per the IRS rules, you have to take Required Minimum Distributions (RMDs) from your retirement accounts from the age of 72. In addition to this, there are several exceptions allowed for withdrawals. For instance, qualified expenses like a loss of job, paying for higher education costs of a child, suffering from a permanent or total disability, covering medical expenses, etc., can be covered with a penalty-free early withdrawal from a 401(k).Retirement planners can help you take cognizance of all such rules and plan your withdrawals efficiently so that you do not lose out on penalties and taxes and get the maximum returns from all your accounts.
It can help cover unforeseen expenses: An unexpected expense in retirement can overthrow your entire plan. This is why it is important to have an emergency fund as part of your retirement plan. Theft, house damage, medical issues, a child or relative requiring financial assistance, etc., can force you to consume a large chunk of your retirement savings sooner than anticipated. In such a case, you can be left with inadequate funds for your future use. But saving for a rainy day can be a way out. Retirement advisors can recommend an appropriate tool for saving for an emergency that offers growth on your money but is also highly liquid. A professional can also help you gauge the right amount of money required for an emergency fund so that you do not end up digging into your savings that are meant for other essential expenses. Buying a sufficient insurance plan, such as homeowners insurance, medical insurance, etc., is also a part of preparing for emergencies that retirement advisors can guide you through.
It can help beat inflation: When you plan for your retirement, you plan for a time in the future. The future comes with its share of uncertainties, one of which is inflation. The rise in the cost of goods and services can affect your savings fund and lower its value. But prudent retirement planning can help here. Retirement planners can offer their expertise on how to select investments and savings that can offer enough growth to offset inflation. This ensures that your money does not lie idle and grows at a high rate that can beat inflation and hold its ground in the future.
It can reduce financial anxiety: A major purpose behind making any plan is to not be caught off-guard. Not being prepared for something can give you anxiety and stress. Hence, it is vital to be prepared. Retirement planning ensures that you have every head covered. Right from taxes to withdrawals, insurance, emergencies, etc., a robust retirement plan takes care of it all. It gives you a clear glimpse into your retirement years and offers you confidence knowing that you will have enough money to take care of yourself and your loved ones.

Retirement advisors can guide you to a stress-free and abundant retirement. They can also help you understand your weaknesses and identify areas that need improvement, so you are not left unprepared at a time when you are financially vulnerable.

What are the different types of retirement advisors in my area that I can hire?

There are different types of professionals who can assist you in building your retirement fund. These professionals not only differ based on their services and areas of expertise but also on their way of working and their remuneration preferences. Here are some broad categories of retirement planners that you can hire depending on your objectives:

On the basis of operation and utility:

General financial advisors: These financial advisors can offer you assistance on a number of topics, such as debt management, tax planning, retirement planning, estate planning, investment portfolio diversification, education planning, succession planning, and a lot more. You can either select a financial advisor for a particular head like retirement planning or hire someone who can take an in-depth look at your finances.
Wealth managers: Wealth managers are professionals who offer the same services as general financial advisors but for high net worth clients. Wealth managers are ideal for affluent people with extremely large estates and highly valuable assets.

On the basis of fee:

Fee-only advisors: Fee-only retirement planners charge a flat fee based on the number of hours they work for you. This fee is predetermined and can be charged on an hourly or monthly basis. It can also be a fixed percentage of your Assets under Management (AUM). For example, if the advisor asks for 2% of AUM and the assets managed by the advisor are valued at $2,000, the advisor’s fee will amount to $40. Fee-only advisors are fiduciaries, so they are legally liable to always put your interest before their own.
Commission-only advisors: Commission-based advisors only charge commissions from the sales they make. Some commission-based advisors may not charge you a fee for managing your investments but will earn a sales commission from a third party when they sell you a product. Others might make a cut or commission from your investments. For instance, if you invest $500, the advisor can cut $50 as their commission. Commission-based advisors are not fiduciaries, so they are not liable to keep your interest before their own.

How to find the right professional for retirement planning near you

There is no right or wrong when it comes to investing and savings. What works for you may not work for the next person and vice versa. Hence, the decision to hire a retirement planner can only be made on the basis of your individual requirements.

For instance, if you are a high net worth individual, a wealth manager would be the ideal choice for you. Such an individual can help you preserve your wealth, grow it further, and efficiently plan taxes. A wealth manager also helps with succession and estate planning. However, if you are not a high net worth individual, you can look for local retirement planners depending on the model of payment you prefer.

In addition to this, you can follow the steps given below while looking for the best advisor for your needs:

Understand your goals: A lot of people are often unsure of their own requirements. This comes in the way of selecting the right professional. So, start by jotting down your objectives. For example, are you looking for help to manage your taxes, or do you need assistance on portfolio diversification?
Do some research: Finding the right fit is important. Hence, do not limit yourself to recommendations by peers and family members only. Instead, do your own research. Check out the local retirement planners in your area. You can use tools like the WiserAdvisor’s Advisor Match Tool. Arrange meetings and see if your temperament and attitude match with the retirement planner. You must also pay attention to other crucial aspects, such as the professional’s certifications, credentials, experience, etc. Proceed to hire the professional only if you are fully certain of your choice.
Make sure the fee structure suits you: A retirement advisor will charge you as per a fee-based model or a commission-based formula. Make sure to hire the professional based on the payment method you are comfortable with. See how each model benefits you or impacts your budget before you move forward.It is also important to understand that retirement planning is a long term process that needs to start when you are earning. A lot of people turn to retirement advisors a few years before retirement. But it may be too late to get things in order by then. The right time to hire a professional who can help you plan your retirement is when you are young. This is the age where the professional can step in and help you save and invest your money appropriately to earn a high yield in retirement.

To summarize

Keep in mind that retirement planning is the only way to ensure a comfortable and financially secure retirement. A professional retirement advisor can play an important part in ensuring this. Retirement advisors can help you lower your tax output, increase your returns, minimize penalties, plan for emergencies and much more. However, when finding retirement planners near you, make sure to keep your goals in mind and hire someone who can help you achieve them with minimal hassles. Be clear about what you are looking for and hire someone that fits not only your budget but also compliments your investment style.