Unfortunately, many people today don’t begin early enough to plan their retirements, nor do they fully grasp the principles of growing retirement income. I attribute this to the lack of solid planning for retirement. There’s actually plenty of good free retirement financing advice out there, but payment to a consultant is usually involved if you want custom information. As a result, some people try to fend for themselves, only to discover too late that they won’t have what they need to retire. That’s why it’s a good idea to use a financial professional to help you plan your retirement. And because it’s your hard-earned money, you should do some research first so you can ask informed questions of the financial advisor. Getting the lay of the land, financially speaking, can also lower the financial consultant’s bill.
Here are some of topics you should know before you pay someone for financial advice:
How insurance affects your financial future
Not everyone needs information on life insurance plans because they don’t have dependents that make life insurance necessary. But those who do need it should choose wisely. Understanding the difference between cash value, term life and variable universal life (VUL) will help you choose the right option for your circumstances. And I’ll clue you into one fact right from the start: whole life and universal life policies usually provide the worst return on investment and will often leave your loved ones with inadequate coverage. So you should keep that in mind when you talk to a consultant.
The differences between no-load and load mutual funds
Some financial advisors work on commission only, so it’s in their best interest to suggest “load” funds (funds with service fees). Sometimes you’re better off paying by the hour for financial consulting, so you can ensure the advice is objective. Once you understand the financial difference between no-load and loaded funds, you’ll see why.
Have an idea when you want to retire and how much money you’ll need
Before you meet with a financial planner, it would be prudent to know approximately when you want to retire and how much money you think it will take to maintain your lifestyle. That will help him or her to work with you to create a plan to get you where you need to go.
Once you’ve done your homework, you’ll want to to do just a little bit more: make some inquiries of your friends and family if they have any recommendations before you choose a financial planner. Once you have those recommendations, see if the candidates have built wealth in their own lives. If they haven’t been able to do it for themselves, they won’t be able to do it for you!