Written by Douglas Velnoskey
The most common fulcrum for people to engage a financial advisor for their personal needs is as their retirement window approaches. For many people this is sometime between the ages of 50 and 55. Generally, this is when people start receiving notifications in the mail regarding their Social Security, Medicare, and AARP benefits. All of which trigger the retirement question. But even younger people have retirement planning considerations such as maximizing their employer provided retirement accounts and utilizing Roth IRA accounts to create tax advantaged sources of funds later in life.
And while the retirement milestone may be the most obvious opportunity to engage with an advisor, it isn’t the only opportunity. Life transitions are also occasions to seek out advice from financial professionals. These could be an inheritance from the passing of a loved one, career or job changes, birth of children or grandchildren, and even starting a new business. These milestones also create similar feelings to the retirement question faced by those in the 50 to 55 age bracket.
For business owners, who may have 80% or more of their net worth tied up in their businesses, working with a Financial Advisor can provide benefits not only for their personal retirement but also their business planning to maximize their wealth when they exit their business. Certain advisors have credentials in this specific space and are known as Certified Exit Planning Advisors® (CEPA®) and they specialize in both the business and personal financial planning unique to owners and entrepreneurs.
Feelings of relief, uncertainty, excitement, and renewed purpose all find their way into our minds during life events. That’s the space where financial professionals provide advice. These milestones are certainly about whether someone has enough saved for retirement or can save enough to help a child or grandchild afford an education, but they are also about hopes, dreams, causes, and many other wonderful things that financial freedom can bring to people’s lives. Of course, the main consideration is usually “Can I do this?” but financial professionals also provide guidance to make sure one’s money lasts their lifetime and, if the client desires, leaving a legacy. Advisors also lend a willing ear for those who seek to experience their lives, not just look at the bottom-line cash flows.
So far, we’ve discussed when to engage with an advisor but the other question that needs to be answered during the process is why engage a financial advisor. An empathetic and understanding ear for those who are going through the milestones of life is certainly one reason to consider engaging with a financial professional. The other reasons are more “traditional”.
A financial professional who is the right fit will consider all the intangible things and blend them into a plan with the more tangible ideas of income, expenses, taxes, and investments to build a holistic and comprehensive plan suited to a clients’ needs and desires. Once the plan is created, it is a living document that can be adjusted, updated, and revised to adapt to the changes in clients’ lives. Advisors who are fiduciaries and operate as Certified Financial Planner™ (CFP®) Practitioners can quarterback the inner circle of trusted professionals who address the various elements of a client’s financial life.
The foundation of financial freedom is operating from a place of confidence with a strong plan that can be adjusted to meet the changing times and circumstances of life. Financial Advisors not only guide clients through the ups and downs of investment markets but they help them see the bigger picture and pull together the numerous pieces of the puzzle so clients can live their best lives doing what they love rather than fretting over their financials every minute.
