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What to Look For When Searching For a Financial Advisor as You Approach Retirement

Financial Advisors, like many professions have the ability to specialize in many areas. Just because they are financial advisors doesn’t mean they are good at how to manage retirement assets or choose an appropriate retirement income strategy to fit you. Before hiring a financial advisor to help you as you near retirement, look for the following criteria.

Education: What is their educational background regarding retirement income strategies? And, what designations do they hold regarding this training, i.e. CFP®, CRPC, etc.? They should have specific retirement planning training to be able to effectively evaluate appropriate strategies and communicate them to you.

Knowledge and Focus: The person you choose must be knowledgeable and stay educated on current federal and state income tax rates and rules, strategies for handling required minimum distributions from qualified plans efficiently and providing for the potential need for all levels of long term care to better assure your financial quality of life as you age. Be sure they are not only a broker or insurance agent. They must be able to provide you with a written plan including appropriate strategies and recommendations. It can also be very helpful if they understand and can provide you with a written “Monte Carlo” projection. This can help to better assure your retirement goals will be met.

The plan: Request to see a sample completed retirement transition, income plan and Monte Carlo report. This can help assure you will be comfortable with what you will be receiving from your advisor.

Experience: How many years have they been working specifically with retirees? What percentage of their current clients are retired? This will help you to feel comfortable that this is truly an area they focus on. I relate this to seeing an estate planning attorney for the work you need regarding wills and trusts rather than seeing a divorce attorney who also happens to handle wills and trusts.

Other professionals: Your financial advisor should be willing and able to work with you, your tax advisor and attorney to coordinate and help you implement your comprehensive ongoing financial plan.

Important: Be sure your personalities “click”. Just like with your doctor and other professionals, you need to feel that your advisor is easy to talk to and really knows you, understands your needs and has your best interest in mind at all times. Getting a referral from someone you trust that has worked with this advisor in a similar capacity, can be very helpful as well.

Nancy Butler, August 2011 ©