Why Have a Financial Planner Handle Retirement Money?

No matter how much homework you do regarding your 401(k), IRA or other nest-egg strategies, you won’t be able to match the expertise of a financial planner when it comes to preparing for retirement. A professional retirement advisor can help you go beyond suggesting individual financial products by creating a long-term plan that includes a variety of savings and tax strategies.

A financial advisor helps identify the benchmarks that should guide your planning.


While you can use a free online retirement calculator to estimate what you’ll need to save for retirement and how much you’ll need to contribute each month, a financial planner can take your research way beyond that by taking into consideration personal goals and situations a calculator can’t. This is done through a process called comprehensive financial planning. Your advisor will discuss scenarios such as having children, buying a house, potential health concerns and your interest in staying liquid in the event you might like to start a business one day. Using this information, your advisor will help you choose the optimal risk level for your investments, based on your goals.

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Some people limit their retirement strategies to making 401(k) contributions or opening an individual retirement account. A retirement planner will help you look at the effects of different life insurance policies, annuities, real estate and mutual funds on your retirement picture. He can recommend strategies such as participating in a flexible spending, health savings or health reimbursement account to reduce your payroll taxes, which you can add to your retirement savings. A key benefit of using a financial planner is that he will help diversify your assets to reduce the risk of devastating losses in the event of an economic surprise.


Using a financial planner to create a comprehensive financial plan and continuing to work with one allows you to adjust your plan based on your changing needs and changes in the economy. As you age and see how your investments are performing and the effects of new legislation, your financial advisor will help you adjust your strategies, including changing investments and increasing or reducing how conservative or aggressive your portfolio is.


A financial planner is knowledgeable about tax laws and strategies and can help you avoid paying penalties, fines or unnecessary taxes. A key part of comprehensive and retirement planning is creating a tax strategy. Your advisor will tell you how to reinvest dividends and profits to reduce capital gains taxes and how, when and if you can dip into your retirement funds during an emergency or opportunity to make more money. A financial advisor also keeps abreast of things such as potential changes to legislation that will affect your Social Security, Medicare, Medicaid, real estate investments, pensions and other retirement products.