What is the difference between a financial advisor and a retirement specialist? Aren’t they both working for you to reach the same goal? A lot of folks are surprised at the differences and what the potential outcome is to them and their retirement.
A financial advisor is primarily concerned with protecting and growing your investment account based on your level of risk and the amount of funds you have invested. And most of them utilize third party money managers so they (the advisor) can focus on obtaining new clients and gathering more assets. Nothing wrong with that, especially when you as an investor are in the accumulation phase and retirement is many years down the road.
But now as you get closer to retirement and want to know when to make the transition, things get a lot more complex. This is the distribution stage, the most critical and when you must know that you will have enough money to last the rest of your life, which is about 30 years!!
A retirement specialist will illustrate the following:
- When to take Social Security benefits in a way that is best for you
- What pension distribution choices are right for you
- How much retirement income you could reasonably expect to have
- The withdrawal rate that is appropriate for you
- How much money should be in guaranteed investments
- How to rearrange investments to reduce taxable income in retirement
- If you should pay off your mortgage prior to or during retirement
- Long-term care insurance needs
A retirement specialist should also be able to analyze which accounts to take withdrawals from each year, and in what amounts, to minimize the retirement taxes you will pay.
There are some other critical elements in the investment side that must be addressed, such as capital preservation, legacy funding and investment portfolio modeling (Monte Carlo) that also must be considered.
If you are ready to take a critical look at retiring, give us a call at 256-417-4870.
P.S. The picture on the right is a dolphin dorsal fin, the one on the left is that of a porpoise.