There are many things you ought to do on your own, but managing your money may not be one of them. Regardless of your age, you likely work very hard for the money you earn; you need to know it’s working hard for you. But if you try to go it alone when it comes to managing it, you may find yourself behind the eight ball, particularly if you’re nearing retirement age. In fact, the more money you have to manage, the less apt you are to manage it well—if you aren’t a financial advisor yourself, that is. The more complex your portfolio, the more experience and knowledge an advisor you’ll need in order to navigate the intricacies of the financial industry. Here are some reasons why a top financial advisor may be a better answer for managing your money than going the DIY road.
What’s the big picture? A financial advisor will help you figure this out. This aspect of money management and hiring a financial advisor is perhaps one of the most important pieces of your financial and retirement puzzle your financial advisor can help you with, particularly if you have many facets to your portfolio. Because managing your money involves different levels of involvement and can include a number of components, including but not limited to health insurance, retirement, taxes, pension, Social Security, hiring someone who is well versed in these areas is beneficial over going it alone. Your financial advisor will be able to analyze your needs and create a general picture of what you have and your needs, both now and in the future.
Financial advisors are knowledgeable about the many different financial products available, meaning they can help you to avoid a potential ‘put all your eggs in one basket’ scenario, which usually is a mistake. You will be able to communicate to your financial advisor of your needs as well as how much risk you’re willing to take, and he or she will be able to narrow down your choices, presenting to you the best options available at your level and risk willingness.
After helping you to build an overall picture as well as design a portfolio to optimize your needs, a financial advisor will be able to assess how much money you need to have built up when you are ready to retire. He or she will know exactly what factors to take into consideration, such as college educations, vacations, current standard of living, etc., and calculate your future needs against your current savings. From there, your advisor will be able to tell you just how much you need to save and what kinds of returns you need on your investments.
The fact that there is an intricate tax web is not lost on any of us, but how to navigate those intricacies—that’s another thing altogether. For instance, most of us don’t know all the tax breaks we should be getting depending on our personal situations, and we’re missing out on refunds the federal government deems we are entitled to. A financial advisor will understand the complex tax code and will be able to optimize your money by getting the full benefits you deserve at your particular tax bracket. Face it—no one should pay more taxes than the government says they owe. A financial advisor will be able to keep you from doing just that. Unfortunately, not all tax preparers understand the tax code comprehensively enough to maximize your refund.
When do you begin taking your Social Security? At what age should you start drawing pension payouts? How much do you need to save for your retirement? What about taxes—how much of them will there be, and how can you streamline your retirement in order to pull the most amount of cash out? These and other important questions are the reason you need a financial advisor. Worrying about money isn’t something you want to be doing when you get to retirement, and with a trusted financial advisor, you’ll be able to relax that much more and focus on fulfilling your leisure time just as you dreamed you could.