A recent Bankrate survey found that 56 percent of Americans feel behind on saving for retirement, leading to financial insecurity. Working with a retirement financial advisor can help individuals get their finances in order and prepare for retirement, allowing them to live their best life. These advisors specialize in crucial areas for retirement planning.
Discover what a retirement financial advisor is and how they can assist you in preparing for retirement. By selecting a retirement financial advisor, you can work towards financial freedom.
Key retirement financial advisor takeaways
- A retirement advisor focuses on the most relevant issues for clients planning their finances leading up to and during retirement.
- Research has shown a good financial advisor can increase your returns by 3 percent per year, so you’d end up with nearly 1.8x as much money over 20 years, according to Vanguard.
- A good retirement financial advisor can help you live the kind of retirement that you want to live – and do so with less worry about the future.
Financial security and retirement preparedness
Many Americans feel unprepared for retirement, yet simple changes or decisions could help secure their financial future. Only 21 percent believe they are on track for retirement, according to Bankrate. Understanding the amount needed for retirement is crucial, but a quarter of Americans are unsure of this figure. A retirement financial advisor can assist in assessing current spending and envisioning retirement goals.
While 52 percent of Americans believe they can retire comfortably, 45 percent are skeptical. Even those optimistic may need guidance, especially considering that about a third of Americans think they need over $1 million for a comfortable retirement. A retirement advisor can help create a roadmap to retirement and boost confidence in achieving financial goals.
What is a retirement financial advisor?
A retirement financial advisor is a specialized advisor who focuses on topics relevant to clients planning their retirement. A retirement advisor specializes in financial topics specifically relevant to those planning for retirement, unlike other types of advisors who may focus on broader or narrower areas of finance. Studies have shown that a good financial advisor can increase your returns by 3 percent per year, leading to nearly 1.8 times more money over a 20-year period.
A retirement financial advisor offers services such as financial planning, Social Security optimization, estate planning, investment management, managing retirement accounts, long-term care planning, and tax planning. They may have specialized expertise tailored to individual needs, such as minimizing taxes for business owners during asset transfers.
Working with a retirement financial advisor can provide expert insight and guidance, helping you make smart retirement decisions and avoid costly mistakes. They can help you optimize Social Security benefits, avoid outliving your income, withdraw money from retirement accounts tax-efficiently, navigate legal issues related to tax and estate planning, and stay on track with your financial plan.
In summary, a retirement financial advisor can help you save money, plan for a secure retirement, and reduce worries about the future. It is important to find an advisor who acts in your best interest and can help you achieve your financial goals effectively. This article delves into more detailed information and statistics related to retirement planning.
Your full retirement age for Social Security is determined by your birth year. Those born in 1937 or earlier have a full retirement age of 65, while those born between 1938 and 1942 have a retirement age of 65 plus 2 months for each year after 1937. For individuals born between 1943 and 1954, the full retirement age is 66, and for those born between 1955 and 1959, it’s 66 plus 2 months for each year after 1954. Finally, individuals born in 1960 or later have a full retirement age of 67. Deciding when to start receiving Social Security benefits is crucial in determining the amount you will receive.
When it comes to retirement planning, the first step is to understand the available resources. This may include access to Social Security, employer-sponsored retirement accounts like a 401(k), and individual retirement accounts (IRAs). Depending on your employer, other retirement plans may also be available. It’s essential to familiarize yourself with the benefits of these plans and determine how much money you will need to retire comfortably.
Investing for retirement involves utilizing tax-advantaged accounts such as a 401(k) or IRA. These accounts allow you to contribute funds and potentially reduce or eliminate taxes on earnings. When considering specific investments, look for options with attractive long-term returns and low expense ratios. An S&P 500 index fund, for example, has historically delivered around 10% annual returns.
In conclusion, saving for retirement depends on your desired lifestyle and expenses. Advisors often recommend aiming for approximately 80% of your pre-retirement salary, adjusting for factors like Social Security benefits and eliminated fixed expenses. Understanding your retirement age, available resources, and investment options are vital steps in planning for a secure financial future.