Whether you are 25, 45, or 65, it’s never too early or late to start thinking about retirement. Ideally, you’ll create, update, or otherwise talk through your plan with a financial professional who can help turn your dreams into reality. Here are five important reasons to consult with a financial planner about retirement, no matter what stage of life you are in.
1- Life Rarely Happens How You Plan It
Perhaps the best reason to work with a financial planner is that life generally unfolds much differently than how you want it to. For instance, a surprise job loss, pregnancy, or medical event could significantly alter your financial outlook. Alternatively, you may win the lottery, get a large inheritance, or otherwise come into significant amounts of money to manage. Either way, it’s important to have someone who can help you create contingency plans just in case.
2- Consider the Long-Term Implications of Your Plan
A financial planner can help you consider how taxes and inflation might impact your retirement account. Typically, money loses value over time because of inflation. However, when done right, an investment portfolio can earn returns higher than inflation, which means that you’re growing your wealth over time. Furthermore, you can learn more about the tax rates on traditional retirement accounts compared to Roth accounts and how that might impact where you put your money.
3- You Might Not Know Where to Start
Talking to a financial professional might make it easier to take the first steps in creating and executing a plan. For instance, you might need help learning how to open a brokerage account, what types of stocks to invest in, or if you need insurance. You may also need help learning about 529 plans to benefit your kids or grandkids.
4- Analyze Your Progress
A financial professional will have a suite of tools to help you contextualize your retirement planning journey. This person will be able to reassure you that you’re doing well or recommend steps to take if you’re falling short of reaching your goals. For example, you might learn about catch-up contributions or spend time talking about ways to scale back your retirement without sacrificing too many of your wants or needs.
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5- Have a Fiduciary Manage Your Money
It’s possible that your financial planner will have a fiduciary responsibility toward you and your money. In other words, that person is required to make decisions that are in your best interest. In some cases, you can have that professional manage your money on your behalf to ensure that your goals are met. This can be ideal if you don’t think that you have the time or self-control to follow through on goals that might take years or decades of work to complete.
Speaking with a financial planner can be the easiest way to get your questions answered in a timely and appropriate manner. Having access to a reliable outside party can take the fear and anxiety out of planning for retirement. Ultimately, you can spend more time living your life and less time worrying that you won’t have enough money to do so either now or in the future.
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