15 Important Questions to Ask Your Financial Advisor When Planning Your Retirement

On the hunt for a financial advisor to help you with retirement? Sometimes it can feel even harder than shopping for a house or a car. learn how to make money It can feel like a daunting thing to get your head around.

However, a few simple questions can help you determine if your financial advisor is right for you. Here are the 15 best questions to ask a potential financial advisor.

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1. What is your financial philosophy?

Money is a personal matter, and hopefully you will have a relationship with your financial advisor for many years. So, it is important for you to determine whether you are ideologically compatible.

It’s okay if your philosophies are a little different – this can represent a learning opportunity for you – but to trust your advisor, you want to be on the same page about some important things.

2. services that you provide?

Different financial advisors offer different things. If you need a specific service, make sure the advisor can deliver. Depending on your needs, you can ask about:

  • tax planning

  • Insurance insurance

  • Budget advice

  • estate planning

  • debt management

  • Retirement planning

3. What professional credentials do you have?

Each financial advisor will have their own specific qualifications. Look for a respected industry designation, such as a Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA).

In order to sell or recommend specific products, advisors may be required to pass a licensing exam from the Financial Industry Regulatory Authority, better known as FINRA. He or she may also need to be registered with the state.

4. Who is your typical client?

Find an advisor who has experience with clients in similar situations as you. For example, if retirement planning is your focus, make sure your advisor has a history of helping clients plan for their golden years.

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5. Are you a fiduciary?

Some people like to make sure that their financial advisor is a fiduciary. This means that the adviser is bound by law to always act in your best interest.

There are many non-fiduciary advisors who do good, ethical work. However, choosing a fiduciary can give you extra peace of mind.

6. How do you make money?

Financial advisors can use a variety of payment structures. If you choose an advisor who makes a commission, he may direct you to products that are not best for your needs.

Instead, you may want to choose an advisor who charges you a fee for the service. If you are choosing a fee-only financial advisor, find out if these fees come down to a percentage of your assets, or if they are in the form of a flat fee.

7. Can you give details about your costs in writing?

If you want to be extra careful, ask your financial advisor to provide a list of all fees and charges in writing. This way, you can avoid unpleasant surprises. Your financial advisor should understand your desire to be “better safe than sorry.”

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8. How will we communicate with each other?

Communication is a major part of any professional relationship. This is especially true when it comes to money. So, make sure you are comfortable with the advisor’s mode of communication.

Does your financial advisor primarily call you, or will you receive messages via email? Or, maybe your advisor prefers to meet in person. Find out and make sure that it suits your communication style.

9. How much money do I need to retire?

For most people seeking financial advice, this is a golden question. There is no “correct” answer here, as experts have many different theories. But your financial advisor should be able to give you a ballpark estimate, and then explain how he arrived at that number.

Do you have other personal financial goals that need to coexist with your retirement goals? Your financial advisor should be able to help with that, too.

10. When can I expect to retire?

Now that you know how much money you need for retirement, it makes sense that you want to know when you can get there.

There is no definite answer to this, because the future is unknown. But your financial advisor should be able to tell you what your retirement timeline looks like based on your specific situation

11. When should I file for Social Security?

Deciding when to file for Social Security benefits is a challenge, because the age you choose will affect the size of the monthly check you receive. It’s easy to find blanket advice online, but your financial advisor should be able to make recommendations that fit your needs and goals.

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12. Do you offer any educational resources?

Different people will have different opinions about how involved they want to be with a financial advisor. If you’re someone who wants to learn as you go, ask your potential financial advisor how much they have to offer in terms of educational materials.

13. What kind of taxes can I expect to pay in retirement?

Some people fail to account for taxes in their retirement plans, leaving them with nasty surprises later on. Your financial advisor can help prepare you for the taxes you will face in retirement.

14. What do you see as the biggest risk facing my retirement?

One of the most impactful parts of financial planning is calculating risk so you can create a contingency plan. By asking the advisor about the risks you face, you know how closely the advisor is paying attention to the current financial landscape.

If you’re putting your retirement responsibilities in the hands of an advisor, you want to make sure he or she has a close eye on the current and future risks you face.

15. What will we do if I don’t achieve my goals?

In a perfect world, all financial advisors would provide a plan guaranteed to help clients achieve their goals. However, the world we live in is not perfect.

Your financial advisor should be able to offer you transparency about what he will do if you are not successful in achieving our financial goals.

Bottom line

If you’re not sure where to start your financial advisor journey, you can find a variety of reviews online. However, it’s not a bad idea to ask friends and family for their personal experiences – sometimes, direct advice is the best way to go in the right direction.

Once you find the right professional, you’ll have expert help in retirement savings, learning how to get rid of financial stressand achieve your other financial goals as well.

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