When is the time?

[Musica40]

I'd appreciate any advice on this question. At what point did you determine you need a financial advisor to ensure you were going down the right path for retirement? What were your deciding factors? What did you look for? Ask? My wife and I are at a point where things are winding down and want to ensure that we don't leave potential opportunities on the table. We have managed our retirement with no advice and are doing really well. I was burned once and have trust issues. We save the max for 401k and Roth's annually. That will go away after we retire. We hope that in retirement, our returns average 6-7%. I feel this is conservative and in line with what the market has been doing over the years. So what do you recommend? Thanks in advance.

 

[Ronstar]

I recommend reading and following along on this board. There is more than enough info and help here to eliminate a need for FA advice on retiring.

But if you feel that FA advice would be helpful in addition to what you'd learn here, I would recommend a simple meeting with an FA to get a conceptual retirement plan and to get your questions answered.

But I wouldn't have a FA manage your retirement $. Just get the ground work done such that you can take it from there.

Best wishes on a smooth transition into retirement and keep in touch!

 

[Blue531]

I manage my own accounts. Haven't seen an FA in twenty years, not that I know everything, but I keep things pretty simple. There is so much information here and online in general to answer most of your questions, if not all. Some people feel more at ease with an FA I'm sure, but others do fine without. I guess it depends on how secure you feel about managing your money, so I cannot recommend which is best for you.

I determined I was going down the right path by utilizing the 4% rule from the Trinity Study and by using 401k/compound interest calculators. Pretty much to determine that I had more than 25x the amount I needed to live on each year for as long as I might live. I considered the worst case scenario and prepared as best I could.

I think that those who do know how to manage their own money care more about it than any financial advisor will.

 

[Ready]

If you hired an FA, what questions would you have for them?

 

[OldShooter]

Welcome, @Musica40. One of the things you will find this forum to be somewhat confused about is the difference between a financial advisor and an investment advisor. The investment advisor job is not difficult once one understands a few principles. Here is an easy and pleasant read: "The Coffee House Investor" by Bill Schultheis https://www.coffeehouseinvestor.com/

"Financial Advisor" is tougher as a DIY because it is pretty broad. A good financial advisor is looking at income tax law, estate tax law, insurance, savings strategies (401K, 529, Roth, tIRA, taxable), withdrawal rules (59 1/2, then RMDs at 72 ), and all the various wrinkles and thresholds like ACA, HSAs, IRMAA, etc. And it's a fast changing landscape.

I think you would be well-served to find and hire an FA who will work on a fee for services basis to help you understand all the forces that affect your retirement and to put together a baseline plane. That might cost you a couple thousand $$ but it might save you more and it will make you more comfortable with your future. I have no direct experience, but people here have reported good experiences using https://www.napfa.org/ and https://www.garrettplanningnetwork.com/ Be a little wary of the phrase "Fee-Only Advisor" though, as this just means the advisor doesn't get paid sales commissions on products he/she sells. It doesn't mean they don't charge an annual "wrap fee" based on AUM (Assets Under Management). You don't want to start with anyone on an AUM basis.

As part of that you can consider hiring the FA as an AUM investment advisor, but I think most of here would advise against it. An assertion you will see in multiple threads is "By the time you know enough to hire a good investment advisor, you won't need one."

 

[donheff]

Just before I joined this board I hired a fee only FA to review my financial plan. My approach was a modification of OldShooters's good suggestion. I had already developed a plan using online guides and advice. So I was able to save money by simply having the FA go over those plans instead of guiding me through plan development. She blessed my thinking with some tweaks to AA. I never considered engaging an FA on the standard, yearly, 1% of AUM approach.

I will say that in my case I didn't get any detailed help on estate or tax planning, or the other topics OldShooter mentions that a good FA could bring to the table. I expect it may be a bit of a crap shoot getting good help along those lines. It would be important to lsit the topics you want from an FA and invite the candidates to suggest other issues they could help with.

Shortly after I joined this board and have found the information here to be more than sufficient.