Investing for retirement is an understandably difficult topic for many people. There’s a lot of arcane detail involved, and for some just thinking about money induces snores.
Yet you know it’s important to save and that your money needs to be both protected and in a position to grow over the long term. Work doesn’t last forever, but the costs of living do. You will need some way to finance retirement.
The answer, for many folks, is to seek out a financial advisor. Usually, this person comes recommended by a friend and has a string of acronyms after his or her name. The advisor may or may not work for a big retirement firm.
He or she also may or may not be a fit for your needs. How can you tell which financial advisor is right for you? Take this simple personality test.
Seeking quality time?
Some people really need to sit down and hash out every angle of their financial lives. Budgets, insurance, investments, even wills and trust matters. If you feel the need for a complete financial overhaul, consider a fee-only planner.
These folks often are experts at overall planning and the myriad topics involved, and they typically charge you a flat hourly fee for advice. A couple of sessions might be all you need to get on the right track.
A hands-on investor?
Retirement investing is a long-view endeavor, but some people just like to be involved in the daily ins and outs of their portfolio. Certain financial advisors are willing to work with you on an ongoing basis and provide insights and referrals to specialists along the way.
They often charge a fee based on your total assets, rather than by the hour. If the fee is reasonable and you find value in the advice, ongoing help can make a lot of sense.
A do-it-yourselfer at heart?
Many investors have come to feel comfortable with their own decisions about how and when to invest but might need help in designing and implementing a portfolio. In that case, online advice can be a very inexpensive alternative to an hourly or asset-based fee.
Using online software to do your own investing is a great way to put the best practices of decades of finance research to work for you. By keeping fees down, you avoid the creeping cost of ongoing management while gaining the advantages of a well-designed, flexible retirement investing plan.