How Much Value Does a Financial Advisor Add?

Matt Stevenson of Allied Wealth discusses how much value does a financial advisor add to help build and maintain your retirement plan.

There are several key elements to building a successful retirement plan that an advisor specializes in to help justify the potential costs of a partnership. These include:

-Understanding your tolerance for risk, and your ability to withstand market impact events to maintain your lifestyle.

-A proper income and distribution plan, including timing on collecting Social Security benefits, how to elect potential pension options, and how to generate consistent income streams from retirement savings.

-How your current mix of investments are working for you, and if any adjustments might be required.

-Proper tax planning to ensure your retirement savings is as tax-efficient as possible should the tax environment change in the future.

-Planning for potential healthcare costs in retirement, as well as assistance with selecting appropriate Medicare plan coverages.

-How to leave a lasting and tax-efficient legacy for a surviving spouse and other loved ones.

In recent times, there has been a lot of debate on whether it is worth paying a financial advisor to help with retirement planning needs. Matt Stevenson talks about a gentleman who advised people against paying financial advisors an annual management fee to help build their retirement plans. According to him, you would not get the value you need out of that partnership to justify the cost. In this article, we will examine how much value does a financial advisor add to your retirement planning needs.

The value of a financial advisor depends on the relationship and the value you get from that partnership. Here are six key points that can help you figure out if you are getting the value out of the partnership that you need to justify the value in that relationship.

The first key point is understanding your risk tolerance compared to your capacity to take risk, especially as you get into those retirement Red Zone years. The retirement Red Zone years refer to the period five years into retirement or five years before retirement when you move from the accumulation stage to the distribution stage. Your mentality shifts quickly from seeking all the growth you can possibly get to considering whether you should be more conservative.

It’s essential to work with a financial advisor that understands that your risk tolerance changes not only as you get older but also on an emotional and behavioral level. An advisor can help you determine what you can afford to lose, what your capacity is to take risks and still maintain the lifestyle that you want over the most important years of your life with the freedom to do what you want when you want.

The second key point is proper income and distribution planning. For many people, they have worked their tails off for many years to save what they can. They’ve done well in saving, which they should be proud of, but they’ve amassed a bucket of stuff and now have to figure out how to turn it into a paycheck replacement that potentially lasts another 20 or 30 years or even longer. An advisor can help you set up income and distribution planning not only in the front years but ongoing throughout retirement.

The third key point is investment planning. Investment planning is what most money managers focus on. It’s essential to understand what you have available and what the mix of stuff that you have is doing for you. An advisor should be able to help you get a good amount of return while minimizing the risk that you’re taking. They can also help you minimize your chances of drawdown and Implement a plan to accomplish those three things.

The fourth key point is taxation. Taxation might stand to be your largest expense in retirement. It is important to understand how much value does a financial advisor add in order to help you develop a plan around how to address that issue. Most of us have saved into these pre-tax accounts throughout our working life, and we get that tax deduction for doing so.

In conclusion, how much value does a financial advisor add to your retirement planning needs is significant. An advisor can help you understand your risk tolerance, set up income and distribution planning, provide investment planning, and develop a tax plan. It’s essential to work with a financial advisor who understands your needs and can help you make informed decisions that align with your goals. So, how much value does a financial advisor add? It depends on how well they understand your needs and help you achieve your goals.

Also read: What To Consider Prior Retiring In 2023


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Topics we will be covering are Retirement and Financial Planning, Investment Selection, Retirement Income Planning, Taxes and Taxation during Retirement, Healthcare, Long Term Care, Legacy and Estate Planning, in addition to important Market and Economic changes impacting Retirement.

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