15 Essential Questions to Ask a Financial Advisor When Planning Your Retirement

Looking for a financial advisor to help you retire? Sometimes it feels harder than buying a house or a car. Learning how to make money can give you a headache.

However, a few simple questions can help you decide if your financial advisor is right for you. Here are the 15 best questions to ask a potential financial advisor.

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1. What is your financial philosophy?

Money is a personal matter, and hopefully your relationship with your financial advisor will last for many years. Therefore, it is important to determine if you are ideologically fit.

It’s okay if your philosophies are slightly different – this could be a learning opportunity for you – but in order to trust your mentor, you’ll want to be consistent on some important things.

2. What services do you provide?

Different financial advisors offer different things. If you need a specific service, make sure a consultant is available. Depending on your needs, you may ask:

  • Tax Planning

  • Insurance coverage

  • budget proposal

  • estate planning

  • debt management

  • retirement plan

3. What professional qualifications do you have?

Every financial advisor has his or her special qualifications. Look for respected industry names such as Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA).

To sell or recommend specific products, advisors may need to pass a licensing exam from the Financial Industry Regulatory Authority (commonly known as FINRA). He or she may also need to be registered with the state.

4. Who is your typical customer?

Find a consultant who deals with clients in a situation similar to yours. For example, if retirement planning is your focus, make sure your advisor helps clients plan their golden years of history.

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5. Are you a trustee?

Some people prefer to make sure their financial advisor is a fiduciary. This means that advisors are legally bound and must always act in your best interests.

There are many non-fiduciary advisors who do good, ethical work. However, choosing a trustee can give you more peace of mind.

6. How do you make money?

There are a variety of payment structures available to financial advisors. If you choose a consultant who offers a commission, he or she may guide you to a product that doesn’t suit your needs.

Instead, you may wish to choose a consultant who charges you a fee for their services. If you choose a fee-only financial advisor, find out if this fee comes down to a percentage of your assets, or if it comes in the form of a flat fee.

7. Will you provide details about the fee in writing?

If you want to be extra careful, have your financial advisor provide a list of all fees and expenses in writing. This way, you can avoid any unpleasant surprises. Your financial advisor should understand your desire to be “safer than sorry.”

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8. How will we communicate with each other?

Communication is an important part of any professional relationship. This is especially true when it comes to money. So make sure you are comfortable with the way your advisor communicates.

Will your financial advisor primarily call you, or will you receive messages via email? Or maybe your advisor prefers to meet in person. Find out and make sure it matches your communication style.

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9. How much money do I need to retire?

This is a golden question for most people looking for financial advice. There is no “right” answer here, as experts have many different theories. But your financial advisor should be able to give you a rough estimate and then explain how he or she came to that number.

Do you have other personal financial goals that need to coexist with your retirement goals? Your financial advisor should also be able to help.

10. When can I retire?

Now that you know how much you need to retire, it makes sense that you want to know when you will be able to retire.

There is no definitive answer to this because future returns are unknowable.But your financial advisor should be able to tell you what your retirement schedule looks like based on your own specific circumstances

11. When should I apply for Social Security?

Deciding when to apply for Social Security benefits is challenging because the age you choose will affect the size of the monthly checks you receive. Package advice is easy to find online, but your financial advisor should be able to make recommendations based on your needs and goals.

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12. Do you provide any educational resources?

Different people will have different opinions on the level of engagement they want with a financial advisor. If you want to learn on the go, ask potential financial advisors how much they offer in terms of educational materials.

13. What taxes can I expect to pay in retirement?

Some people don’t factor taxes into their retirement plans, which surprises them later. Your financial advisor can help you prepare for the taxes you will face in retirement.

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14. What do you think is the biggest risk to retirement?

One of the most impactful parts of financial planning is considering risk so you can develop contingency plans. By asking an advisor about the risks you face, you can get an idea of ​​how concerned the advisor is about your current financial situation.

If you hand over the responsibility for retirement to an advisor, you want to make sure he or she pays close attention to your current and future risks.

15. What will we do if I don’t meet my goals?

In a perfect world, all financial advisors would provide a plan guaranteed to help their clients achieve their goals. However, the world we live in is not perfect.

Your financial advisor should be able to provide you with transparency about what he or she will do if you are not successful in meeting our financial goals.

bottom line

If you’re not sure where to start your financial advisor journey, you can find various reviews online. However, it’s never a bad idea to ask your friends and family about their personal experiences — sometimes, first-hand advice is the best way to move in the right direction.

Once you find the right professional, you’ll get expert help with saving for retirement, learning how to eliminate financial stress, and achieving other financial goals.

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