The Importance of Personalized Retirement Planning: 5 Things You Should Know
We hear a lot about the importance of retirement planning, but when it comes time to settle on a strategy – many of us turn to an advisor instead of doing it ourselves. The problem is that most advisors use a formulaic approach – meaning they aren’t considering your individual needs when making recommendations.
And while formulas can help guide your investments and other financial moves during retirement, they’re unlikely to provide all the answers you need—especially if you have complicated circumstances or want more control over how much risk you take with your portfolio.
You’re unlikely to have a 1:1 match with an advisor.
A common way to incentivize advisors is to offer a matching contribution. This means you put in $1, and your advisor puts in $1 – for example. However, it’s important to note that this isn’t a guarantee and even if it were, there are other factors at play when deciding whether or not someone should seek out an advisor.
Do you wonder how much money do I need to retire? If you’re wondering how much money I need to retire – there are a few things to consider.
For example:
- You may not want the same goals as your advisor (e.g., if your goal was to retire early but theirs wasn’t).
- You may not have the same time horizon (e.g., if they are focused on maximizing returns over short periods).
- Or perhaps they don’t share your risk tolerance (e.g., if you are more comfortable with risk than they are).
So, while it is essential to consider your advisor’s conflicts of interest, there are many other factors to consider.
You need to know the costs of different services.
The cost of your retirement plan is a percentage of your assets; so, it’s essential to find out what that percentage will be before deciding on a plan. One-time costs are usually lower than ongoing fees (although exceptions exist).
One thing that can help with this is finding out how much you’ll pay each year and dividing it by 12 months so you know exactly what each month’s share will be!
A customized plan may take longer than a formulaic approach.
However-it is essential to know that this time is well spent and will pay dividends in the future. You should also consider how much you value your relationship with your advisor and how comfortable they make you feel during the process.
If they are not listening or acting like they know more than you do-it’s probably time for someone else!
You will likely be working with a professional who doesn’t earn commissions.
One of the most significant differences between working with a commissioned advisor and one who doesn’t earn commissions is that the latter won’t be incentivized to sell you products.
As long as they keep their job – they won’t lose anything by helping you make a good decision. They’ll be able to help you with your long-term goals without worrying about whether or not they’ll get paid for it later on down the line.
A good retirement plan is more than just the numbers.
Financial planning is more than just the numbers. It’s about helping you understand your options, making the right decisions & creating a plan that helps you achieve your goals.
A good financial planner will ask questions like – What are your goals? How do they align with what matters to you? How can we help make those things happen in the best way possible?
There you go!
A good retirement plan is more than just the numbers – it’s about knowing what’s best for your life circumstances, goals, needs & more.
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The Importance of Personalized Retirement Planning: 5 Things You Should Know