In this do-it-yourself (DIY) world, many people choose to manage their investments on their own. After all, the Internet is a treasure trove of information, and online trading forums make it easy for regular investors to trade like the pros. Nevertheless, even if you are investment savvy, sometimes a little help can go a long way. Whether you are having trouble planning for your retirement, or you have an estate you want to leave to your heirs, here’s a look at five reasons getting the help of a financial planner can pay you back in dividends.
You Don’t Know How To Save For Retirement
Retirement planning and saving usually goes beyond just putting money away in a company-sponsored retirement plan. While these saving plans help, often people have to supplement a 401(K) with additional savings and investments. It’s possible you will live more than twenty years in retirement, and if you want to keep the same lifestyle you had when you worked, you will need the help of a financial advisor. Financial planners will go over your current financial situation. Additionally, they will help you figure out how much you realistically need in retirement and structure a plan that meets your goals and needs.
A Marriage Or A Divorce Is In The Cards
Getting hitched means more than two people are coming together. It also means a commingling of income, assets, and debts. With financial woes being one of the main reasons people getting divorced, getting the help of a financial planner before you walk down the aisle or just right after you get married can go a long way in avoiding marital strife. A financial planner can help both husband and wife budget their money, save for common goals and make the right investment choices. If the newlyweds have different ideas about their financial objectives, a financial planner can bridge the gap.
The same can be said for a divorce. If this is the first time you will be managing money on your own, or you came into a sudden windfall because of an impending divorce, a financial planner can help you along the way.
You're Caring For An Aging Or Sick Parent
Nobody wants to see their mom or dad become ill as they age, but unfortunately, that is a reality for millions of people. Caring for an aging or sick parent is going to require more than being a caregiver, it’s going to cost money and lots of it. If you don’t know where to start in terms of paying for care or you’re squabbling with siblings on the best way to do it, a financial planner could be in order. After all financial planners are neutral parties and aren’t going to take sides in a family fight. Experts in elder care are going to know the ins and outs in terms of covering the bills, getting the best care, and whether or not the person is eligible for aid and government benefits.
You Receive a Sudden Windfall
There’s a reason many lottery winners end up bankrupt a few years later: they don’t know how to handle a sudden windfall. Whether you just got a sizeable sum of money from an inheritance, you won the lottery or landed a lucrative job, managing large amounts of money can be complicated. If you make a few bad mistakes, that money can be gone in no time, which is why the help of a financial planner may be necessary. When people come into money, lots of hands are usually extended looking for a way to cash in. A financial planner is going to give you sound advice and prevent you from blowing the money on gifts for families and friends. The financial planner will also help you figure out ways to grow your sudden windfall to meet your long time goals.
You Have An Estate You Want To Leave To Heirs
The intention of leaving an estate to heirs is to ensure they can live comfortable once you are gone, but devising an estate plan has become increasingly complex, and may require the help of a professional. While an estate plan has to consider federal tax laws, now state governments have gotten into the mix with at least nineteen of them having an estate tax or inheritance tax. New Jersey and Maryland have both. In addition to the tax repercussions of an estate plan, parents have to consider who to leave the money to and who will be in charge of the estate. A good financial planner will work with you to create an estate plan that addresses the needs and goals of multiple heirs.
The Bottom Line
Going it alone may seem like the cheapest way to manage your money and investments, but it can end up costing you a lot in the long-run. Whether you are struggling to plan for retirement, or you came into a sudden windfall, the help of a knowledgeable and reputable financial planner can go a long way in making sure you stay on course to meet your unique financial needs and goals.