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Does a Soon-to-Be Retiree Need a Financial Planner?

This article was written by Jackie Goldstick, CFP® and Todd Schanel, CFP®, CPA, CFA.

You have gotten this far without the help of an advisor, or maybe you have had advisors in the past who have not met your expectations. But now you are about to retire—things are going to change. Do you need a financial planner to have a successful retirement?

You knew how important it was to save, and over the years you did the best you could—perhaps you even got some help from the market. Now, on the eve of your retirement, you find yourself in a position where the assets you have accumulated coupled with the income sources you have in retirement such as Social Security, perhaps a pension, perhaps rental income, need to support you for the remainder of your life. There isn’t a lot of room for error.

Issues Retirees Face

There are a myriad of complex issues that retirees are faced with. How and when you should collect Social Security benefits? Which accounts should you tap to meet your income needs? How can you make sure that you minimize your tax liability? How do you achieve growth, but not at the cost of assuming more risk than you can emotionally or financially handle? (For related reading, see: How to Create an Effective Retirement Income Strategy.)

These are the kinds of questions that a financial planner can help you answer, and their insight can prove to be quite valuable. The advice they give has the potential to save you significant dollars and significant amounts of stress. That is, if you work with the right kind of financial planner. 

A financial planner that can truly make a difference for your retirement is not one who makes predictions or sells you products as a means to allay your fears of running out of money. It is not someone who promises they can beat the market or one who has a fail-proof strategy. It is not someone who suggests that you should lock up a portion of your money for a period of time. (For related reading, see: What Does Good Financial Advice Look Like?)

What a Good Financial Planner Can Do for You

A financial planner who can help is one who understands that you are embarking on a new phase of your life. And as with anything new and somewhat unknown, flexibility is critical. A financial planner who designs a proactive plan, not a reactive one, is one who will help you succeed no matter what the market environment. A financial planner who stays on top of industry developments, constantly changing tax laws and regulatory modifications will help ensure that you are capitalizing on all the opportunities available to you. A financial planner will help give direction, but will not make promises about how much you can spend, how much you will have in your account at any given point in time or what your returns can be. Models will be used and interpreted as planning tools, not as guarantees. 

So, do you need a financial planner in retirement?  There is no question that the right kind of planner can offer invaluable advice and peace of mind. The key is being aware that virtually anyone can call themselves a financial planner today. You need to make sure you pick the right one. When you do, it may prove to be the best financial decision you ever make.

(For more from this author, see: Baseball and Investing: How to Win at Both.)