5 things I learned from a financial advisor about retirement

Senior Couple Meeting With Financial Advisor At Home

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I didn’t seek out a financial advisor until I was less than five years from retiring. That was a mistake. Let’s call that the first lesson learned.

1. Get financial advice for retirement early

Unless you know about the world of finances and retirement, you’ll need help because it’s an extremely complex field. You have the tax system, superannuation, and, if you’re depending on a pension, Centrelink to work with as you attempt to optimise your income in retirement.

And things can change quickly.

Getting early help means you have time to work on various options to grow your retirement funds. You can be intentional about developing immediate and long-term goals.

2. It’s better to know than not know

Ignorance is not bliss. Even if your financial situation is unhealthy, it’s better to know it. That means you know the problems and can work toward resolving them.

There can’t be a much worse situation than telling the boss you’re retiring only to discover you don’t have enough money to retire. How do you go about asking for your job back?

Knowing 10 years before what you have and what you need, and having a financial strategy for retirement is so much better.

3. Trust is important 

When you go to a financial advisor, you need to be able to trust them. And that’s about much more than the information you’re receiving. Often a first visit is free. This allows you to assess them without obligation.

Before committing, when sitting across from your potential financial advisor ask yourself, Am I comfortable with this person? This is less about wanting to exchange Christmas cards and more about whether you’re on the same wavelength.

Is the advisor listening? Does he/she understand what you want to achieve? Do you trust this person with your information and your dreams?

How are you treated? There’s a difference between, ‘Well, that’s a stupid idea!’ and, ‘I see what you’re trying to do. Have you ever thought of this approach?’

Your idea may be stupid (we all have them), but any advisor must show respect. You would want them to respectfully give reasons why it is stupid—that’s what you’re, potentially, paying them for.

4. The advantage of the dumb question

There’s no such thing as a dumb question, right? We both know that’s not true—especially when we ask it in a group setting and discover that the answer is obvious. That’s embarrassing.

Fortunately, you’re not in a roomful of people when you talk to your financial advisor. It’s you and her/him. Your advisor has the information. Ask any question you want answered—even ones you think you may know the answer to.

Remember, your advisor is not there to test your financial IQ. You’re thinking of hiring them to be that. If there’s something you need to know, ask. Better to know than to be uncertain. In this setting, there really are no dumb questions.

5. You’ll be more in control of your money

Your financial advisor will help you develop a plan for your money to attempt to get the best financial gains for your retired life. You’ll have a greater sense of being in control of your money.

Yes, there is a cost. But there may be a far greater and ongoing cost if you don’t set your finances up for retirement in the right ways.

One more thing

My experience with my financial advisor was very positive—and helpful. Not everyone has that experience. If that first visit doesn’t work, walk away without committing to anything.

Not happy with the advice received? It’s your money and you don’t have to follow the advice (there may have been a cost for the advice, though). And there are governing organisations and legal processes you can take if you find or suspect something fishy happening.

More information: Check here for steps to finding financial help for retirement. Check here for advice from a professional on finding a financial advisor.

Bruce Manners: the author of Retirement Ready?, Refusing to Retire, and founder of RetireNotes.com

Category: Finances

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