Starting a New Career

Who needs financial planning?

Anyone who wants to be able to get to and through retirement successfully. For that matter, anyone who wants to increase their chances of successfully reaching any of their short- or long-term financial goals (building emergency savings, debt service, buying a home, college education, optimizing Social Security strategies, building an investment portfolio, creating estate plan for heirs, etc.).

When should you start financial planning?

Yesterday – but since you may have missed that particular deadline, let’s get going on it today! Since there are many possible entrance points into the process, now really is a great time to get going.

Early in your career? Start planning now to create an emergency savings account, to plan your paydown of any (probable) student loan debt, and to build your 401k investments.

Middle of your career? Get help with college planning for your children, optimizing your 401k allocation, building an estate plan, and creating a plan to pay off your mortgage earlier than expected.

Late in your career? You better have a solid idea about what your retirement glidepath needs to be so that you get a running start on life after work. Work with an advisor to optimize your specific Social Security strategy and to plan how you’re going to pay for what could be hundreds of thousands of dollars in healthcare costs throughout retirement.

Already retired? Get more help making sure your investment plans, financial affairs, and estate issues are in order for your family after you’re gone.

Where should you get financial planning advice?

Wherever you are, be certain that you’re working with a fiduciary – someone legally-obligated to put you and your best interests first at every point throughout your client/advisor relationship.

If you work with an expert, what does financial planning typically include?

If you’re working with the right expert, it should always focus on you and your goals for your finances … not whatever the person is trying to sell you, that day. You should have multiple discussions about what you’re trying and wanting to accomplish.

Your discussions should include:

• Issues faced during accumulation, pre-retirement, and retirement phases
• Budget planning
• Employer-sponsored retirement plan optimization
• Life insurance
• Education and college planning
• Estate planning
• Tax optimization
• Health care
• Long-term care
• Social Security optimization
• Retirement distribution

How much does financial planning cost?

You’re always going to get what you pay for. “Free” may not cost anything now, but it’ll be really expensive for you to fix later. Just because something costs a lot doesn’t mean that it’s valuable to or for you.

Since you’re always making sure to work with a fiduciary, you’re going to be on more solid footing from the beginning because you know that their financial interests are aligned with yours.

It’s usually better for you to work with fee-based advisor/planner to further align your interests. Financial planning charges could be via fees, commissions, or a combination of both.

What questions should you ask your financial planner?

Are you a fiduciary? You want to hear “Yes”; if you hear anything but “Yes…”, run away!

How are you paid? It’s optimal for you to hear that they’re paid on a fee basis. Make sure you clearly understand the compensation structure – ask now—before you’re a client and before it’s even more difficult to have this conversation.

What is your process? You want to hear about services provided and the processes followed. If you only hear about products they want to sell you … run away!