Do I Need a Financial Planner After I Retire?

Posted by Robert Cobean on Sep 24, 2022

We’ve written a great deal about financial planning, especially regarding retirement. Many financial planners are dedicated to retirement strategies, helping you save money and accumulate assets so you can enjoy a comfortable lifestyle after receiving that final paycheck. 

But is a financial planner necessary after you retire? It might be in your best interest to retain one. Financial planners are trained and educated to help clients, whether they’re launching careers and families, or have left the workforce. 

A qualified financial planner can help with the following aspects of retirement. 

Rules and Regulations 

Retirement funding is subject to a variety of rules and regulations, whether you’re depending on a defined-benefit plan (such as a traditional pension plan or qualified-benefit plan) or a defined-contribution plan (think 401(k) or IRA). The financial planner keeps on top of those requirements, informing you about withdrawal requirements and possible penalties.  

For example, your defined-contribution plan carries a required minimum distribution, or the minimum amount that you must withdraw annually when you reach the age of 72. Failure to withdraw that minimum can lead to a hefty penalty. A financial planner can provide you with this and other essential information. 

Money Management 

You’ll likely be living on a fixed income after you retire. This means you need to have a handle on daily expenses and budgeting. Furthermore, market fluctuations can raise concerns about whether you need to move your funds into other investments. Guidance from a financial planner can be invaluable when it comes to helping you with expenses and seeking to ensure your investments deliver what you need. 

Qualified financial planners can help you develop a budget on your fixed income, while continuing to manage your portfolio. A financial planner can also help guide you through certain scenarios, like how to contribute to a grandchild’s college tuition fund or tax-advantage strategies concerning home sales capital gains. 

Health, Care, and Life 

Once you retire, you will likely lose employer-sponsored benefits such as medical, dental, and vision. Many financial planners partner with brokers and agencies that offer insurance policies to supplement Medicare coverage. Additionally, financial planners can suggest life insurance (to help protect your loved ones and assets if you die) and long-term care insurance (which fills gaps not covered by health insurance).  

Estate Planning 

Retaining a financial planner post-retirement can also be helpful with estate planning. Even if you already have a will with designated heirs and beneficiaries, things have changed. For instance, you’ll likely be withdrawing funds from your IRA, which can reduce the amount available to your heirs. Speaking of which, you’ll likely require separate plans for tax-deferred assets; for example, IRAs don’t receive a step-up in basis, meaning they’re subject to ordinary income tax rates when passed to your beneficiaries. 

A financial planner can help determine what wealth can be separated from your day-to-day expenses, and what tax-advantaged strategies can be used for funds and other assets. 

Keeping the Planner 

Your financial planner helped you prepare for retirement. Even if you’ve stopped drawing a regular paycheck, it’s important to maintain your relationship with him or her. Having a financial professional in your corner can provide many benefits when it comes to enjoying your lifestyle, protecting your assets, and setting up a legacy. 

This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice, meeting the particular investment needs of any investor. 

Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation. 

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