Financial uncertainty is one of the biggest sources of stress among Americans in or approaching retirement.
Not knowing what your expenses will be, especially if you or your spouse needs long-term care.
Uncertainty over whether your combined income sources will allow you to live the way you want to or whether you’re investing your retirement savings in ways that enable it to last for potentially 25 years or more. Uncertainty over how to minimize the impact of capital gains taxes and investment expenses.
And concerns over how to discuss your wealth distribution intentions to your family without causing conflicts.
Fortunately, professional help is available. A qualified, fully vetted fee-only fiduciary adviser can help you address all of these issues and more.
What can they do for you, and what will you get for the fee you pay, year in and year out? The best way to get your money’s worth out of a fully vetted fee-only fiduciary adviser is to learn how other people are using theirs. Here are examples.
1. To make sure you won’t run out of money in retirement
One of the biggest questions retirees or those approaching retirement worry about is whether their various sources of income from Social Security, pensions and 401(k) plans will be enough to let them live the way they want to when they retire.
A fully vetted fee-only fiduciary adviser has the objective “fresh eyes” to review your investment strategy, stress-test your income assumptions and projections and analyze current and future cash-flows to give you the “big picture” of what you may be able to do with what you have now, and what you may need to do to make sure you still have it later.
2. To figure out how much you can afford to spend in retirement
If you have a 401(k) plan or traditional IRA, you’ll need to start taking required minimum distributions (RMDs) when you reach age 72. But it isn’t always easy to figure out whether you can “get by” with the minimum or need to withdraw more to meet your spending needs.
A fully vetted fee-only fiduciary adviser can work collaboratively with you to show you the potential short and long-term impact of different withdrawal scenarios so you’ll get a better sense of how long your retirement savings will need to last.
3. To create a paycheck for life’ strategy
If your retirement accounts are almost fully invested in bonds or cash by the time you’ll retire, there’s a good chance that your nest egg will actually lose value over time since returns won’t keep up with inflation.
A fully vetted fee-only fiduciary adviser can review your portfolio and recommend an appropriate mix of stocks, bonds and cash that help provide the income and liquidity you need today while giving your nest egg a greater chance to continue providing the same or even more income decades from now.
4. To keep your portfolio aligned with your retirement goals
Entrusting your investments with a fully vetted fee-only fiduciary adviser can help ensure that your portfolio is constantly being monitored, adjusted and rebalanced in a tax-efficient manner to reflect your unique financial objectives, timeframe and risk tolerance.
They’ll also audit your accounts to identify ways to replace higher-cost mutual funds with lower-cost index funds and ETFs that offer similar returns.
The fees you pay a fee-only fiduciary financial adviser may pay for themselves when you consider the thousands of dollars in capital gains and ordinary income taxes and investment expenses you’ll no longer have to pay every year once your portfolio is fully optimized.
5. To preserve and grow your wealth during a major life transition
Divorce. The death of a loved one. The lifetime financial support needed for a child with special needs. All of these life events present financial challenges that most people don’t have the time or desire to deal with.
A fully vetted fee-only fiduciary adviser can work with you to come up with strategies and solutions to address these emotionally draining transitions, as well as help you avoid making costly tax mistakes during events such as a windfall you’re expecting from the sale or a home, an inheritance, or the exercising of stock options.