The Senior

5 Benefits of working with a financial planner to plan your retirement

Here are five benefits of working with a financial planner to plan your retirement. Picture Shutterstock
Here are five benefits of working with a financial planner to plan your retirement. Picture Shutterstock

Have you started planning for retirement yet? Yes, we know it can seem a bit daunting having to plan for something that may be up to 40 years down the line, but the earlier you start, the more comfy you'll be in the future. Getting a financial planner to help you is the best place to start.

The first step is to get in touch with a reputable financial planner, like contacting the team at Solace Financial, which is a professional financial planner dedicated to helping you build your financial future. You might think opening up your finances to a stranger is risky, but financial planners are extremely skilled in their jobs and help you plan wisely and effectively for your retirement.

Here are five benefits of working with a financial planner to plan your retirement.

What is a financial planner?

Financial planners are individuals dedicated to guiding others with their finances. They help them achieve their financial goals by utilising strategic thinking and planning. In essence, they help you work towards your financial goals by charting the course to achieve them.

There are a few ways they do this, for example, by tax planning, investment management, retirement planning and certain products like insurance, retirement annuities, and medical insurance.

Five benefits of hiring a financial planner for retirement

Interested yet? Financial planning is so broad and necessary that financial planners are readily available all over the world. For those of you who've ever had a financial planner talk you through how to achieve your financial goals, you could attest to their benefits. But for those who haven't, here are five benefits to hiring a financial planner to help you with your retirement planning:

1. Expertise and knowledge on building wealth for the future

Firstly, financial planners don't just wake up one day and suddenly know how to navigate the stock market or set up your retirement plan. They go through years of studying and practice to gain the knowledge and skills to effectively help others manage their finances and save towards their retirement.

From having an in-depth knowledge of tax regulations and exceptions to staying up-to-date on the latest investment opportunities, financial planners make it their life mission to help individuals achieve their financial goals.

2. Personalised financial planning for your retirement goals

One significant advantage of working with a financial planner is the personalised approach they offer you. They'll take the time to understand your individual financial situation, goals, and aspirations before giving you a plan of action.

By using info like your income, expenses, assets, liabilities, risk tolerance, and time horizon, they'll design a retirement plan that falls in line with your goals, ensuring you're getting an effective and personalised retirement plan that'll set you up well for the rest of your life.

3. Investment guidance and portfolio management

The world of investing can be intimidating and confusing. Financial planners offer guidance on investment opportunities and help you construct a healthy, diversified portfolio.

They'll assess your risk tolerance and weigh up your investment goals to recommend good investment strategies to achieve the desired result for your retirement. They can also manage your investment portfolios, ensuring they stay in line with your goals and that they continue to improve.

4. Tax and estate planning

Like investing, navigating tax can also be tricky. There's nothing worse than expecting a huge lump sum of money when you retire and then having the government take half of it. Financial planners generally have an in-depth knowledge of how taxation works. They'll employ strategies to minimise your tax liabilities and maximise your tax returns. They also help you take advantage of tax-efficient investment methods, retirement options, and deductions to optimise your tax situation.

Financial planners also assist with estate planning, ensuring that your assets are distributed according to your wishes while minimising tax implications for your kids. Through careful planning and execution, financial planners help you preserve your wealth for your kids, leaving you with a long-lasting legacy.

5. They take the emotion out of Investing

Dealing with finances can be stressful, and investing can often trigger emotional responses, especially when finances start to tighten up. Financial planners have a unique way of helping you take emotion out of investing by looking at the numbers logically. They provide an objective-orientated perspective, encouraging you to keep your eyes on the prize, which in this case is retiring with enough to live well.

When should you start planning for retirement?

You should start saving for retirement as soon as you can. Generally, financial planners will suggest that you start saving as soon as you have a salary that'll allow it. This is because the earlier you start, the better the final result will be when you're ready to retire.

There are a few types of retirement saving plans, but most of them involve putting away an amount every month, which is then re-invested into several investment options. Depending on how your financial planner sets up your retirement plan, the money will usually be compounded every month, earning interest and growing as you continue to save.

The result is that you'll have a decent amount of money to live on when you retire at the age of 65. So the earlier you start saving, the more time your savings have to compound and grow.

Frequently Asked Questions

Do I need a financial planner for retirement planning?

It is possible to manage your own retirement planning, but it is not suggested. Financial planners are equipped with the knowledge and connections to create and effectively manage your retirement planning. This means that they know how to get you the best deals, how to work through tax obligations and get you the best results when you eventually retire.

How much does working with a financial planner for retirement planning cost?

The cost to work with a financial planner might vary depending on the plan they put you on as well as their own fees. In some cases, financial planners don't charge for the planning side of your retirement plan, but a service fee is added to your retirement plan amount that comes off your account every month.

How can I find a financial planner?

Finding a financial planner to help you with your retirement planning isn't too difficult. There are loads of reputable financial planners worldwide. Some of these can be found online, and others can be found by word of mouth. A good way of finding a reputable financial planner is to ask friends, family, and co-workers about who they use. This way, you can get a good overview of their performance from someone with first-hand experience.