Some people think you need to be a millionaire to consult with a financial advisor, but this simply isn’t the case anymore these days. There are many instances that merit consulting with a professional.
Maybe you’re not sure where to begin with your finances, you want a clearer picture of what to do to reach your long-term goals while avoiding costly mistakes. Perhaps your finances have gotten more confusing as they’ve gotten more complex. Or you’re experiencing a life-changing event that affects your money, like marriage, a new job, or retirement.
Planned or unplanned, life has many surprises. Finances can increase…or decrease depending on what’s taking place. It’s important to have an action plan to keep yourself in line with your future goals and avoid costly mistakes on the way there.
If any of these are the case, you may want to consider working with a financial advisor instead of going it alone.
A couple's financial literacy is one key to a successful life together and should include maintaining a budget, managing debt, and setting short and long-term goals—together. It’s important to have regular conversations about your personal financial goals, what you’re comfortable saving and spending, and what issues may be causing you money-related stress.
Financial advisors can work as a neutral party to help you develop a plan to address any cash flow issues, investments, debts a spouse is bringing into the marriage, determining what you should save for retirement and even the most suitable insurance and estate planning options.
Having (or Adopting) Children
Raising a family with someone you love is a beautiful part of life. But it’s also an expensive one. Adoption costs, childcare costs, health insurance, and/or a reduced income when a spouse downsizes their career or stays home to raise a child, can impact your financial situation (and stress levels). There are also education saving and tax planning items parents should consider. Discussing your options for these considerations with a financial planner can help your family become better prepared for the future.
Starting a New Job
Changing jobs can be exciting and a bit scary. When it comes to work, there’s a lot more than wages to consider. A financial advisor can help you compare options for what to do with a 401(k) (rollover to IRA, rollover to new 401k) and select allocations in a new retirement savings plan.
They can also guide you to make the most of your employer’s benefits package. Financial advisors will help you decide which health plan makes the most sense (high deductible health plan (HDHP), PPO, or HMO), decide whether you should pay for the supplemental insurance offered through your employer, and explain the details about your stock compensation or stock purchase plans.
Preparing for Retirement
Many of my clients approached me when they were in their late 40s or early 50s and thinking ahead to retirement. I often hear that while their finances had been on autopilot, now that they’re ten or years from either downsizing their career or retiring, they’re ready for someone to help them look at the big picture to see if they’re on track.
It can feel a little overwhelming to figure things out like whether you have enough saved, when it is best to take Social Security, whether to cash out or annuitize a pension, how to cover healthcare costs, and whether you’re giving too much away to Uncle Sam in taxes, to name a few. A good financial advisor is there to guide you along the way so you can make more informed decisions to live comfortably in retirement.
You Just Feel Stuck When It Comes to Your Money
“It might be time to get some help if you're feeling stuck about taking action or making decisions in your financial life.”
If you have a nagging suspicion that you should be doing more with your money or keep putting off making changes or decisions about it, a financial advisor can meet you where you are and share how different outcomes might affect your future. They might be able to offer a unique financial perspective on an action to take that you hadn’t thought of, or help you uncover why you’re hesitant to make a decision in the first place.
Hand in hand with helping you understand your options to make a decision and motivating you to make a change, an engaged financial advisorcan check in with you to make sure you’re working through your action plan. Perhaps most importantly, find one that will do so without judgment.
What to Look for in a Financial Advisor
I truly believe that anyone can benefit from talking to a financial advisor. I advise looking for a fiduciary, fee-only financial advisor like me who offers a comprehensive financial planning package as well as hourly rates for advice on just a topic or two.
I choose to work this way because it allows me to serve clients regardless of how much they have in investable assets. There are also even more affordable options from financial experts who offer online content and courses.
For more information on finding a financial advisor, check out my recent blog, “How to Interview a Financial Advisor to Find the Right Fit for You” to find your perfect match!
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No investment strategy assures success or protects against loss. Investing involves risk, including the loss of principal. The information in this post is not intended as tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This information should not be relied upon as the sole factor in an investment making decision.