Planning for Retirement: Should You Hire a Retirement Advisor?

Many people underestimate the importance of a retirement advisor in personal financial planning. The truth is, having your finances in order is key to the stress-free retirement period that many don’t achieve.

In a 2019 retirement survey, 45 percent of Americans said they had zero savings for retirement. Another 19 percent revealed they were likely to retire with less than $10,000. If this report is something to go by, 64 percent of Americans could retire broke.

While you might not have a salary or regular income in your golden years, you’ll need money for upkeep and eventualities. Read on to discover how the right financial advisor can assist you in developing a concrete nest egg for your future.

Essential Considerations for Retirement Planning

A retirement plan provides insights into how soon you are likely to attain your life goals. It adds transparency to your cash flows, income, expenses, and the path you should take to reach your objectives. Here are some considerations as you develop a retirement plan.

Retirement Goals

Without goals, post-retirement years can be a nightmare. You’ll need money, whether it’s for pursuing your hobbies, opening a business, relaxing at home, or supporting a social cause. Inform your financial advisor about your intentions so those goals can be included in your retirement plan.

Living Expenses

Meeting your living expenses can be uncertain when you don’t have a paycheck, and those receiving pensions or gratuity after retirement often find the amount is not enough to sustain the lifestyle they would want. Accumulating considerable retirement savings can help to maintain your living standards after retirement.

Unforeseen Events

Life can present unexpected situations that may require colossal amounts of money. It’s essential to include a contingency fund in your retirement savings to manage adverse events smoothly.

Price Inflation

Keeping your retirement savings in a bank account is not the best option because money loses value due to inflation — which diminishes your purchasing power in the future. A retirement advisor can structure a plan that accounts for inflation, rate of return, life expectancy, and other factors that may impact your goals.

Retirement advisor helping clients

Retirement Planning Checklist

After defining the moving parts that might affect your future financial security, assess your personal finances and compare them to your objectives. The following questions will help you to know where you stand so you can adjust accordingly.

Are You on Track Financially?

Check your retirement savings and investments and estimate whether you have enough to take care of your life after retirement. Revisit your financial projections. If you are off track, consider readjusting. For instance, you can rollover your 401(k) to an IRA or increase your monthly savings to grow your retirement nest egg.

How Much Will You Spend Annually?

Estimate your costs per year after retirement. Start by computing the payments currently coming from your paycheck that you’ll have to pay out-of-pocket after retirement, like health insurance. Consider other costs that might come in the future, too, including home renovations and automobile replacement.

Similarly, find out if some current expenses will decrease when you stop working. Typical examples are commute and dry cleaning costs. Work with your financial advisor to create an intelligent estimate of your annual expenses in retirement.

How Is Your Projected Spending Power?

Estimate the amount of money you will need to be able to spend comfortably in your retirement years. Base it on the amount you’ll have saved and how long you expect to live after retirement. Add your IRAs, 401(k), savings, and other investments and divide the sum by your estimated retirement years.

The calculation above gives you the amount of money you can withdraw per year. If you hope to have some retirement income annually, add it. The result illustrates your spending power, and your annual expenses should not exceed it.

Can You Afford Medical Care?

Some reports say a healthy couple aged 65 years and retiring in 2019 will spend at least $387,644 on healthcare after retirement. While the amount is higher than the entire retirement savings for most people, it doesn’t include long-term care.

Ensure you have the best Medicare policy you can afford and buy Medigap insurance for additional coverage. You may also purchase long-term care insurance or fund an old age annuity. Also, see if Medicare pays private caregivers in your state and find someone to offer long-term care services if necessary after retirement.

Significance of a Retirement Advisor

Retirement planning can get intricate since it involves reviewing your personal finances comprehensively and projecting into your future — and a  lot can change between now and when you will retire. A retirement advisor is a financial professional who advises clients on building a nest egg for their golden age. He or she identifies your retirement savings targets and guides you on how to achieve them.

What a Retirement Advisor Does

A retirement advisor examines your financial position in depth, analyzing your assets, investments, real estate, expected inheritances, and other valuable resources. The professional will also want to know your liabilities, including mortgages, credit cards, student loans, car payments, and other debts.

The next thing your retirement advisor will ask is when you plan to retire and the goals you have for the life after. How much will you be getting from Social Security, and when do you want to start collecting? What type of life insurance do you have?

With this information, the retirement advisor formulates a solution that helps you realize your retirement plans. You get guidance on the best investments for growing your nest egg and saving while servicing your liabilities.He or she will also recommend ways to make the most from your retirement investments — for instance, should you collect your pension as a lump sum or annuity — and can also compute the potential income you can generate from your accounts in retirement.

Choose the Right Retirement Advisor

Look for an experienced retirement advisor who understands the stock market cycles to benefit from rewarding long-term investments. You’ll also want a professional who will protect your financial information and be available when needed. Contact Bogart Wealth today to discuss your retirement planning questions or other issues concerning wealth management.


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