Creating a long-term financial plan and adhering to it is a proven method of ensuring a comfortable retirement. Some people are capable of doing this on their own and that’s great. Others need help navigating the myriad of choices. This is where the hiring a financial advisor can be beneficial.
So, when is the best time to find one?
In an interview with U.S. News and World Report, Nicole Rutledge Regilio, a certified financial planner, says that once someone has a stable and steady income, and the ability to save at least 20 percent of it, considering a financial advisor makes sense.
However, there are a number of other considerations to ponder as well.
Your Career Is Just Beginning
Starting young delivers significant advantages, thanks to the magic of compound interest. Getting into the habit of investing 20 percent of your income from your first job out of school and continuing to do so throughout your career will stand you in much stronger stead when you begin relying upon your savings.
This is an ideal time to begin working with a planner as you can map out a much broader time horizon, which can amplify your successes. To get around the cost, look for an advisor who works on an hourly basis to help you establish a plan, then work it on your own going forward.
Life Events Dictate Change
Consulting a financial professional is a wise move before you get married or enter a domestic partnership. You’ll be merging finances and presumably sharing financial goals. A professional planner can help you direct your funds to the best effect.
If you’re about to have a child, you’re going to need to plan for the cost of their education — at a minimum. You might also want to be in a position to help them acquire their first home. Many experts feel planning for events such as these should take precedence over your income level when you ponder the feasibility of working with a professional.
In other words, you can still benefit from working with a professional advisor, even if you aren’t making hundreds of thousands of dollars a year.
Financial Issues are Worrying You
Managing bills, paying taxes and saving for the future can weigh heavily on your psyche if you’re carrying a lot of debt. A debt settlement company like Freedom Debt Relief might serve you better in an instance such as that before continuing to pursue your long-term goals. After all, it’s easier to plan for the future when you’re debt free.
Money Management Is Time Consuming
A lot of people just wing their finances because they’re making enough money to live comfortably. This is especially true when earning that income leaves them little time to focus on much of anything else.
While most of us are capable of saving a set percentage of our income — and there are many thousands of terabytes of data out here about how to do so — hiring a financial advisor will get you farther along faster.
This also takes some of the pressure off of you, eases your mind and can set you on a well-considered plan toward financial independence.
Finding the Right Person
Financial planning networks are a good place to start looking for help. The Alliance of Comprehensive Planners is a 501(c) (6) not-for-profit community of financial planners and a good first place to seek assistance.
Before you sign, make certain the person is a certified financial planner. You also want someone who is a fiduciary required by law to put clients’ best interests first. Some advisors offer financial products from which they derive income, with no concerns about whether they are right for your situation. Hiring a fee-based fiduciary removes the financial incentive for them to shoehorn you into products.
In some cases, you might be better served by working with an accredited financial counselor than hiring a financial advisor. These professionals specialize in helping middle and lower-income individuals with issues such as budgeting, paying off debt and saving for retirement. While they don’t offer investment advice, they can help you get your financial situation on firm footing to prepare you for working with an advisor.