When to Ask for Help Managing Your Retirement Finances

A couple getting help managing their retirement finances

Planning and saving for retirement is a long process that doesn’t end once you hit retirement. You’ll still need to manage your investment portfolio and balance other sources of income with Social Security benefits. Depending on your situation, it might make sense to get help managing your retirement finances. 

Saving For and Managing Retirement on Your Own 

Early on, it might seem easier to save for retirement without a lot of help. Making use of online calculators, you can usually figure out how much you need to invest in a tax-advantaged retirement account each month. 

If your employer offers a retirement plan, you can easily have money withheld from each paycheck to grow an investment portfolio. In general, most of these retirement accounts have a selection of funds and don’t require a lot of planning. 

Additionally, using a robo-advisor in conjunction with an IRA can be one way to begin saving and investing for retirement without the need for an employer plan. 

“For those with simpler needs, a robo-advisor can provide basic portfolio management,” says Eliza Arnold, the co-founder and CEO of 401(k) provider Arnie. “But there’s no true one-size-fits-all. As your financial situation becomes more complex, you may find it beneficial to seek professional help.” 

Later, though, as you transition to retirement, you might feel like you need more guidance as you manage your investment account, start taking Social Security, or manage other aspects of your personal finances in retirement. 

When Should You Get Help Managing Retirement? 

Once you move past the building phase of your retirement portfolio and it’s time to start living in retirement, you might want to get some help, no matter how much money you have.  

“Asset thresholds don’t make a difference,” says Michelle M. Vargas, CFP, who practices at Waymaker Financial Planning. “When a client takes charge of their finances either by researching on their own or hiring an advisor, they often feel more at peace because this area of their life is taken care of.” 

Taylor Kovar, CFP, CEO of Kovar Wealth Management, agrees that the size of your retirement portfolio and the amount of other assets are less important than whether you feel out of your depth. 

“Signs you might need assistance include being constantly stressed about money, being unsure of how your investments align with your goals, or experiencing significant life changes,” Kovar says. “Additionally, if you’re frequently second-guessing your decisions or you’re unsure about tax implications, it might be time to seek guidance.” 

Pros and Cons of DIY vs. Getting Help Managing Retirement 

Arnold points out that there are advantages and disadvantages associated with doing everything yourself. She says the pros of managing your retirement on your own include: 

  • Lower costs 
  • More control over your retirement portfolio 
  • A direct relationship between your decisions and outcomes 

However, when you manage everything on your own, you might miss out on professional expertise and a disciplined strategy. Arnold says that you’re less likely to make decisions based on emotion when you get help from someone else as you juggle your retirement income needs and goals. 

When you get help from a professional, you’re likely to pay some type of fee. This can be a drawback, but paying the fee can be worth it if you receive the guidance and peace of mind you need to move forward with a plan you’re comfortable with. 

Some different ways that advisors might be paid include: 

  • Commission. Receive a payout when they put you in specific funds, insurance policies, or other financial services. 
  • Fee. In some cases, an advisor has a set fee for specific plans, like retirement planning or certain aspects of an estate plan. An hourly fee might also be an option. 
  • Assets under management. Rather than receiving a set fee or a commission, an advisor might take a portion of your portfolio size. Their payment depends on the success of your portfolio. 

Carefully consider your comfort level with different payment structures as you weigh the pros and cons of DIY vs. getting help. 

How to Find Someone to Help Manage Your Retirement Personal Finances 

Kovar suggests considering your needs as you consider who should guide you as you begin making decisions during retirement.  

“The spectrum of professional help varies widely,” Kovar says. “At one end, you have robo-advisors that provide basic guidance based on algorithms. There are some financial advisors that offer personalized investment strategies, and at the top tier, you have wealth managers that offer comprehensive planning, including estate planning and tax strategy.” 

Vargas recommends vetting your advisor and taking the time to learn how they’re paid.  

“First and foremost, look for a professional who has competence and several years of investment experience,” she says. “Look for someone who asks the right questions, listens intently, speaks in everyday language and presents a workable plan that you can act on.” 

Getting the Right Help for Your Retirement Needs 

For many people, it might make sense to manage your retirement portfolio on your own (or with the help of a robo-advisor) until a few years before retirement. At that point, a professional who can help you evaluate tax implications, how much you need, and how to balance retirement income with Social Security benefits can make a difference.  

“Remember to thoroughly vet any professional you consider engaging to help manage your finances,” Arnold says. “Check their qualifications and ensure that their services align with your specific needs and goals.” 

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