One of the biggest myths that looms in senior circles is that retirees do not need the services of a financial planner. Perhaps it is because people perceive retirement as the finish line to a race. It is more comparable to halftime in the Super Bowl of your financial life. While you may have made it to the biggest game in your career, you still need a coach and a team to help you clench the championship.
That being said, here are some reasons for retirees to consider seeking sound counsel from a team of financial professionals:
Make it last forever: While many people diligently save during their working careers to adequately prepare for retirement, very few know how to make that money last the duration of their lives.
Think about it: The transition from having a paycheck direct deposited into your checking account twice a month to managing a lump sum, such as a 401(k), for the rest of your life can be daunting for even the most financially savvy retiree. Your financial adviser serves as your coach and devises a game plan to invest your retirement assets wisely, in a way that can provide you with income on a regular basis to satisfy your expenses.
Your adviser also can help you maintain your focus when distractions in the media threaten to get you off course.
Leave a legacy: Some people want to donate to organizations or leave an inheritance after their life is over. Others want to witness their gifts benefit others during their lifetime. When it comes to giving to charities or individuals, retirees often need help deciding which assets to give and how to give them in a way that minimizes taxation. Regardless of your concern, a competent financial planner and tax accountant can provide guidance that supports your generosity in the most tax efficient way.
Make provisions for dependents: A significant portion of most retirees’ income could be cut for their surviving family members if they die. For instance, even though a widow may receive her deceased husband’s higher social security check, her social security check will be eliminated. That can be a significant pay cut to the household. Additionally, that same widow may now receive a pension from her husband’s former employer, but the payout may be a fraction of the benefit the husband received while he was living. That creates another pay cut to the household.
Married couples need to be clear about the financial impact of the death of either spouse and properly plan in advance. An often overlooked concern involves families with an adult special needs child. It is imperative that parents make provisions for these children with the same care as they would for a minor child. While you may desire to be the caretaker for your child with special needs, your health may not allow you to do so for as long as you intend. Take this time while you are in good health and of sound mind to make legal, financial, and care giving provisions for the person who depends on you the most.
None of these scenarios are uncommon and with proper planning, retirees can devise a game plan to navigate through these concerns before they become a pressing issue.
Life is a journey; plan for it.
Ashleigh Brooker, CFP, is the principal of A.J. Brooker Financial Associates in Columbia. Reach her at info@AJBrooker.com or (803) 724-1235.