Retirement brings a new set of financial questions. You may wonder when to claim Social Security, how much you can safely withdraw from savings, or whether your investments still fit your needs. You might also need to update a will, plan for future health care costs, or decide what to leave to your family.
Some retirees or soon-to-be retirees consider a Certified Financial Planner, but when do you need one? You do not need to wait until you have a financial problem before asking for professional advice. A planner can also help when you face a major decision, want another set of eyes on your plans, or simply want to know whether all the pieces of your financial life work well together.
What Does a Certified Financial Planner Do?
A Certified Financial Planner, also known as a CFP® professional, is a financial professional who has completed specific education, examination, experience, and ethical requirements. If you are considering a planner, make sure they have the CFP® designation. A CFP® designation matters because it shows the CFP Board certified the person for the stringent responsibilities of the job.
Financial planners may help with a wide range of subjects. These can include retirement income, investments, taxes, insurance, Social Security, and estate planning.
The main advantage of comprehensive planning is that it looks at your finances holistically.
You Are Getting Ready To Retire
The years just before retirement can be some of the most important for financial planning.
While you were working, much of your focus may have been on saving money. Retirement changes the question. Now you need to decide how to turn those savings into income that may have to last for decades.
A planner can help you look at questions such as:
- How much can you reasonably spend each year?
- Which accounts should you draw from first?
- When should you begin Social Security?
- How much cash should you keep available?
- Does your investment mix still make sense?
You may also need to prepare for expenses that do not arrive every month. Home repairs, a new vehicle, travel, or help for family members can change your spending for a year.
You Are Unsure When To Claim Social Security
If you’re nearing retirement and are unsure when you should claim Social Security, you may need a Certified Financial Planner to discuss your options and provide solutions that fit your situation specifically.
Some people claim benefits as soon as they become eligible. Others wait because delaying can increase their monthly benefit. The right choice depends on more than age alone.
Your health, work plans, savings, marital status, and other income can all matter.
For married couples, the decision can become even more complex because each spouse’s choice may affect the household’s income.
A financial planner can help compare different claiming dates and show how they fit with the rest of your retirement plan.
Your Retirement Accounts Have Become Complex
Many people reach retirement with money spread across several accounts. You might have an old 401(k), a current workplace plan, traditional IRAs, Roth accounts, pensions, savings accounts, or taxable investments.
Having several accounts is not necessarily a problem. The challenge comes when you need to decide how they should work together.
You may wonder whether to consolidate accounts, change investments, make Roth conversions, or begin withdrawals from certain accounts.
A CFP® professional can help you see how one financial move may affect other parts of your retirement picture. For tax questions that require special advice, the planner may also suggest working with a qualified tax professional.
You Have Experienced a Major Life Change
A major life event is a good reason to review your financial plans. Retirement itself is one example. Others include marriage, divorce, the death of a spouse, receiving an inheritance, selling a home, or moving to another state.
These events can change more than your monthly budget.
After the death of a spouse, for instance, the surviving spouse may need to manage accounts that the other person once handled. Beneficiary information may need attention. Insurance coverage and future income may also change.
A planner can help organize the financial side of the transition and identify decisions that need attention now versus those that can wait.
You Need To Review Your Estate Plan
If you own a home, have retirement accounts, or want certain people to receive your property, you already have reasons to think about what happens after your death. A financial planner can help you review how your financial accounts fit with your broader estate plan.
However, a financial planner does not replace an estate planning attorney. An attorney should prepare legal documents such as wills and trusts and provide legal advice.
The planner’s role may include helping you understand how your accounts, beneficiaries, insurance, and other assets fit together. The planner can also work with your attorney or tax professional when a question crosses into another area.
You Are Worried About Running Out of Money
One of the biggest retirement concerns is simple: Will my savings last? There is no single withdrawal rate or investment formula that works for everyone. Your spending, income sources, investments, health care needs, and expected retirement length all affect the answer.
A financial planner can test different situations. What happens if the market drops early in retirement? What if you spend more than expected for several years? What if one spouse lives much longer than the other?
Running these kinds of scenarios cannot remove uncertainty, but it can help you understand where your plan is strong and where you may need more flexibility.
You Do Not Need a Planner for Every Financial Question
If your finances are simple and you feel comfortable managing them, you may only need help with a particular question. Some planners offer one-time planning services. Others work with clients on an ongoing basis.
Before hiring anyone, ask the planner about payment. Find out what their services include and whether there are separate investment management fees. You can also ask how frequently you will meet and who will handle your questions after completing the initial plan.
The Right Time Depends on Your Situation
There is no single age when everyone needs professional financial planning. For many retirees, the best time to consider getting help is when financial decisions start affecting several areas at once.
You might be preparing to leave work, deciding when to claim Social Security, reviewing investments, or updating an estate plan. You may simply want reassurance that your current approach makes sense.
Professional guidance cannot remove every risk from retirement. It can, however, help you understand your choices and make decisions with a clearer view of how they fit together.
For many people, that clarity becomes especially valuable as retirement moves from something they are planning for to the life they are already living.
