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Do I Need to Hire a Financial Planner* to Help Me Retire From the State of Florida?

January 31, 2022
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Many people getting ready to retire from the State of Florida grapple with this question.   On one hand you want to know that your retirement process will be streamlined, efficient and customized for YOU, and on the other hand, you’re not sure you want to use your energy to go through the process of finding and engaging in a relationship with an advisor.  

You’re not sure what that would even look like.  You begin to consider that maybe figuring everything out on your own might be the best route. 

You’re not alone in your thought process.   Questions that come up the most for pre-retirees are:

  • Do I really need a financial planner?
  • Is a financial planner worth the cost?  
  • How do I find a financial planner who is a good fit for me?  

In this article, I’ll help you answer these questions…

By the way, if you’re also looking to potentially increase  your retirement income and avoid running out of money, click here to watch my complimentary short video!  

  1. Do I really need a financial planner?  

To know whether or not you need a financial advisor requires you to know yourself well.  Ask yourself:

  • If I didn’t hire an advisor, would I really do the due diligence necessary to make sure everything is in order for this next phase in my life?  
  • Would I feel comfortable doing this?  Would I feel at peace?  Sometimes people don’t know what questions to ask.  You don’t know what you don’t know.
  • Do I prefer working solo vs. being in a professional, collaborative relationship?  And yes, a good client/planner relationship is collaborative.  Planners get paid for giving advice and sometimes telling you things you don’t want to hear.
  • Do I feel competent gathering information, possibly reinventing the wheel, monitoring investments and reviewing, creating strategies for myself based upon current law and market changes?  Who else is counting on my decisions?  I.e. spouse, kids, parents…

If most of your answers to these questions are yes, then you may not need a financial planner.  If you had trouble answering them with a whole-hearted yes, read on…

  1. Is a financial planner worth the cost?  

Please know that advisors have different business models, thus different services offered and pricing.  

  • Some information is  free - the state of Florida gives you a hotline to call and you can talk to someone who is knowledgeable about the Florida Retirement System.  This is great, except they cannot really advise you on other variables that affect your decisions since they are not in a relationship with you.  
  • Financial professionals working with investments usually charge a fee and/or commission.
  • Financial professionals working for annuity companies are generally commission based.
  • A Certified Financial Planner™ can capture the moving parts of your retirement and consolidate them into one holistic plan.  Costs vary for this.  Generally a fee based planner charges about 1% of assets under management.  Multiple studies have shown that a planner enhances the performance of a portfolio as well as providing a wealth of other services.  If you want to learn more about this in detail then click here to watch my complimentary video.  

  1. How do I find a financial planner who is a good fit for me?

I recommend interviewing 3 different advisors/planners.  Ask them about their training and experience and pay attention to the questions they ask YOU. Ask them about their process. And accessibility.  Will you be dealing directly with them - or communicating through their assistant?   Google them.  Try to clarify what it is you are trying to accomplish - i.e. a feeling of peace, some sort of a plan going into retirement, what to do with your DROP money, an income strategy, ongoing advice, just enough advice to get you on your own, etc.  

So, if you take time to thoughtfully answer these questions, you should be able to provide more clarity for yourself and potentially the professional you hire.  But answering these questions is only the beginning.  If you’d like to look at the bigger picture then click here to watch my complimentary video.

*Advisor/planner - what’s the difference?  An advisor generally focuses on investments, whereas a planner takes a more holistic view of your financial life.  The Certified Financial Planner ™ certification is considered the mark of excellence.  

SOURCES:

https://www.forbes.com/sites/kristinmckenna/2020/08/10/do-i-need-a-financial-advisor-or-should-i-do-it-myself/?sh=6ee70ec0716b

https://www.kiplinger.com/personal-finance/603198/do-you-need-a-financial-planner-5-points-for-and-against-hiring-one

Russell Investments - Why Work With A Financial Advisor?