• Sun. May 26th, 2024

I’m a Financial Planner: Things You Should Work With an Advisor on at Every Age

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Having a financial advisor can be incredibly helpful in navigating life’s significant events and making smart financial choices. Not only will they help you understand your goals, but they’ll also work with you to establish a detailed plan for achieving each one.

Keep reading as we explore the different times in life when it’s crucial to work with a financial advisor.

Budgeting and Savings in Your 20s

After graduating college, many find themselves making their own financial decisions for the first time. Unfortunately, many high schools and colleges don’t teach basic personal finance skills, which means you’re left to figure things out on your own or hire someone to help.

Most 20-somethings won’t have the investable assets available to justify hiring a traditional financial advisor. However, this is a great time to work with a financial coach who can help you understand the basics of living within your means and beginning to put away some of your earnings.

“In your 20s, working with a financial coach to set up a budget and pay down your debt can help set a strong foundation for your future,” said Jay Zigmont, PhD, MBA, CFP®, founder and CEO of Childfree Wealth®. “Your goal should be to get past the ‘rent and ramen’ stage of just barely making ends meet.”

Investing in Your 30s

By the time you reach your 30s, you have several years of work experience under your belt. At this stage in your life, you’ve hopefully paid off a portion of your student loans, if you had them. You’ve probably already started putting some cash away. Maybe you’ve been saving to purchase your first home. If you’ve gotten married, you might have kids and college planning at top of mind. Unless you already have a financial background, these are the things you’ll want a financial planner to help you navigate.

“In your 30s, life is probably starting to happen all around you,” said Andrew Van Alstyne, financial planner and investment manager at Fiduciary Financial Advisors. “Marriage, kids, promotion, moves, etc. and you’re probably laying out cash hand over fist to cover these expenses.”

Van Alstyne went on to say this is when most people realize that the future matters and at a certain point you want to be able to kick your feet up and enjoy your retirement years.

“With a financial advisor you should be working on ramping up your retirement savings until you get to a place where you’re maxing out your contributions before you’re 40,” Van Alstyne said. “You and your advisor should also be working on additional savings strategies for other goals you’ll have along the way to retirement (education, vacation, home purchase(s), etc).”

Retirement Planning Should Be In Focus by 40

By time time you reach 40, retirement planning should be a significant focus. If you haven’t been saving much for retirement up until now, you’re likely behind due to missing out on compounding interest. 

As you make your way through the decade, most will reach their peak earnings point in their career. This is the best time to catch up with your retirement planning. Working with a financial advisor can help you get back on track while still staying within your set budget.

Something else you’ll likely need to start planning for as you reach your 40s is potential long-term care for your parents. This is a conversation you’ll want to include them in, but a financial advisor is going to be able to factor these needs into your plan.

Estate Planning in Your 50s 

As you reach your 50s, it’s time to start thinking about how you’re going to pass along the wealth you’ve accumulated so far in life. Working with a financial advisor or estate planner will allow you to set up an estate plan that walks through how your assets will be passed along and how to do it in the most tax-advantaged way.

“This decade is also crucial for serious consideration of estate and legacy planning,” said Cliff Ambrose, FRC℠, CAS®, founder and wealth manager at Apex Wealth. “Discussions with a financial advisor should include how to protect your estate and ensure your wealth is distributed according to your wishes. This involves reviewing and possibly updating wills, setting up trusts, and considering the implications of estate taxes.”

Ambrose added, “In your 50s, collaborating with a financial advisor is essential not just for meeting immediate financial goals but for making strategic decisions that will affect your comfort and security in retirement. This proactive financial planning ensures that you can face the transition into retirement confidently, knowing your financial affairs are in order.”

Deaccumulation in Your 60s and 70s

As you reach your 60s and you’re inching closer to retirement, it’s going to be important to work with your advisor to make the transition smoother. You’ve spent much of your career building assets, but now you’ll need to learn how to properly spend them.

“As you look at your 60s you need to shift your focus from accumulation to deaccumulation,” Zigmont said. “You need to start planning to spend instead of saving. Which money you use, and when, will impact both your investments and taxes. You will want a CFP® professional to figure out how much you can spend, and when. If you don’t have a plan you may end up spending more on taxes in your later years than you did in your earning years.”

Financial advisors can be hugely beneficial in all stages of your life. They’re going to guide you through planning and executing some of your most important financial decisions. Making sure you hire an advisor you trust is going to make the entire process just that much easier.

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