Planning for retirement can be a very exciting thing. But it can also be overwhelming. Even if you’re someone who saves consistently in an IRA or 401(k) and who’s pretty financially savvy, it’s hard to wrap your head around a decades-long period of life where you may not be working for a living.
That’s why it’s so important to enlist the help of a trusted financial advisor. Here are five big retirement concerns a financial advisor can help you reconcile.
1. Having enough money to retire
You may be putting money into your IRA or 401(k) plan each month. But does that guarantee you’ll end up with a large enough nest egg? Not necessarily.
A financial advisor can help you invest your retirement savings so your portfolio does more of the heavy lifting, allowing your contributions to go even further. They can also help you calculate a savings goal so you’ll know if you’re on track at various points during your career.
2. Making sure your money doesn’t run out
Hopefully, you’ll meet your savings goal by the time you retire. But it’s equally important to ensure that your money doesn’t run out in your lifetime.
A financial advisor can help you come up with a smart withdrawal strategy that’s designed to make your nest egg last. That withdrawal rate can hinge on factors that include your income needs as well as your health and life expectancy.
3. Figuring out when to claim Social Security
One of the toughest retirement decisions you might have to make is figuring out when to claim Social Security. Those benefits might end up being your only source of guaranteed retirement income for life, so it’s important to file for them strategically.
A financial advisor can help you decide when to claim Social Security based on your income requirements, health, and goals. They can also run the numbers for you to show you the impact of filing for benefits early, late, or on time. And if both you and your spouse are entitled to Social Security, a financial advisor can help you coordinate your claims to maximize those benefits jointly.
4. Maintaining your buying power through inflation
Although Social Security benefits are set up to adjust for inflation, if living costs rise substantially during your senior years, your retirement savings risk falling behind. A financial advisor can help prevent that from happening by setting you up with the right portfolio investments.
It’s important that your retirement portfolio generate income without exposing you to too much risk. A financial advisor can help you strike that balance so you don’t have to worry about losing buying power through the years.
5. Managing taxes
Taxes can have a huge impact on your finances as a retiree. A financial advisor can help you minimize your tax burden so you’re paying the IRS as little as possible. That could mean strategically timing Roth conversions or taking advantage of legal loopholes that help you avoid paying taxes on required minimum distributions.
A financial advisor can also help you plan for those taxes you inevitably can’t get out of. That way, they won’t have to take you by surprise and throw your retirement budget off course.
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