How to Pick a Retirement Financial Planner
Regrettably, some people don’t begin planning their retirements soon enough, nor do they fully grasp the principles of growing retirement income. I attribute this to the fact that most people don’t have access to dependable asset allocation advice. It’s not that there isn’t good financial investment advice available, but you usually have to pay if you want the information customized to your needs. As a result, some people try to fend for themselves, only to find out later that they’re not where they want to be financially. That’s why it’s a good idea to use a financial professional to help you plan your retirement. And since it is your hard-earned money, you should do some research first so you can ask intelligent questions questions of the financial advisor and understand the answers. Learning the financial ropes a bit in advance can also lower the financial consultant’s bill.
Here are some of the subjects you should investigate before you hire a professional financial advisor:
How insurance impacts your financial bottom line
Some people don’t need information on term life insurance vs. whole life insurance because they don’t have anyone depending on them and causing them to need life insurance. But those who do should make sure they understand what they’re buying. Knowing the difference between cash value, term life and variable universal life (VUL) will help you choose the right option for your circumstances. And let me give you one piece of information right out of the gate: cash value policies usually provide the worst return on investment and will often leave your loved ones with inadequate coverage. So you should bear that in mind when you talk to a consultant.
The difference between load and no-load mutual funds
Some financial advisors work on commission only, so it’s in their best interest to suggest “load” funds (funds with service fees). This is why it’s sometimes better to pay by the hour for financial consulting, so you can ensure the advice is objective. Once you understand the financial difference between no-load and loaded funds, you’ll see why.
Have an idea when you want to retire and how much you’ll need to save
Before you meet with a financial planner, it would be prudent to know approximately when you want to retire and how much money you think it will take to maintain your lifestyle. That will help her form a plan.
Once you’ve done your homework, there’s just one more thing to do: ask the people you know if they have any recommendations before you choose a financial planner. Once you have those recommendations, see how well that person has done with his own finances. If you don’t see evidence of that they did it for themselves, they won’t be able to do it for you!