Beginning your retirement planning early and with a professional to help guide you is the key to making sure you have a successful retirement. However, with so many experts, advisors, and salespeople out there, it’s difficult to know how to find the right person for this important job. Zynergy Retirement Planning will break down what you need to know regarding financial planners and give you all the information you will need to make an informed decision when choosing a retirement planning professional you’d like to work with in Howell, NJ.
When Should You Begin Retirement Planning?
Simply put, you should begin planning for retirement as soon as you can. Ideally, you’d start saving in your 20s, when you first leave school and begin earning paychecks. That’s because the sooner you begin saving, the more time your money has to grow. Each year’s gains can generate their own gains the next year – a powerful wealth-building phenomenon known as compounding. This is why it is so important to start planning for retirement early.
Visit our blog to find helpful tips and answers to your important Retirement Questions, including:
- How Much Should I Contribute To My 401k?
- How Much is Enough for my Emergency Reserve?
- What Is a Roth IRA Conversion and When Should I Consider It?
- How Do I Supplement My Income in Retirement?
Types of Retirement Planning Professionals
The next big decision is what type of Howell retirement planning professional to hire. Among Certified Financial Planners, the industry gold standard, there are three types of compensation models which may affect the type of experience you have:
- A Commission-Based Financial Planner receives 100% of their compensation from commission sales. Their incentive is primarily to sell you one of their products, rather than provide sound financial advice. A simple analogy would be a car salesman at a dealership, who is trying to push you towards an expensive sports car even though you have made it clear you need a family-friendly that meets your budget and safety requirements. The salesman clearly does not have your best interest at heart, and you’ll have a frustrating experience as a result.
- A Fee-Based Financial Planner earns a small fee from their clients in addition to commission sales. This is an effort to get a planner more invested in their client’s success as opposed to getting the sale, but the majority of their compensation is still based on selling products, so there is still a conflict of interest. Imagine another car salesman who points you towards the family car you are looking for, but keeps pushing expensive features you do not want or need.
- A Fee-Only Financial Planner earns 100% of their revenue from their clients. They do not receive any commissions or compensation of any kind on the financial products they recommend. There are far less conflicts of interest, and their only goal is their client’s success. In the case of the car dealership, this salesman shows you the car you need, helps you decide which features you need and which you do not, and tells you how you can get the best deal.
Benefits of Choosing a Fee-Only Financial Planner
A Fee-Only CFP® is not only qualified, but they also have your best interest in mind. What exactly is it that makes a fee-only financial planner a better option for most people than the other options? We have three major reasons choosing a Howell fee-only financial planner is in your best interest.
- Fewer conflicts of interest. A fee-only financial planner has no incentive to pitch options or promote funds that would benefit them more than it would benefit their client. While fee-based planners can provide perfectly good service to their clients, it does open up questionable relationships between clients, planners, and investment options. You can avoid any questionable intent by working with a fee-only financial planner.
- The focus is on financial advice. Fee-only financial planners are there to provide the best financial advice, and not try to sell financial products. Providing good advice on where to put your money is good for you, which will end up being good for them too. It’s a win-win situation.
- Percentage based payment options. Most fee-only financial planners will charge a percentage of the amount of money they manage. Once again, this incentivizes a fee-only financial planner to be as efficient as possible with your money, as the returns will ultimately benefit both parties. If you make money, they make money too.
Make Sure Your Retirement Planner is a Fiduciary
On top of choosing a fee-only financial planner for your retirement planning, you should also make sure they are a fiduciary. This means they are required to act in the best interest of their client when handling retirement investments. A financial professional who is not a fiduciary has no obligation to put the needs of their clients ahead of their own.
When Do People Normally Retire?
The truth is that retirement should be a personal decision based upon your unique desires, beliefs, and financial resources. Learning about when the average person retires is effectively useless in determining when will be the right time for you.
Although most of the people we work with retire between the ages of 62 and 70, each situation is different. The answer to when you will retire should be based on your responses to the following questions:
- When can I afford to leave work and either semi-retire or completely retire?
- Am I physically able to continue in my work?
- Do I still enjoy the challenge of work?
- What will I retire to? How will I spend my days?
- Would I prefer to work longer and enjoy a more comfortable lifestyle in retirement or retire younger and live a simpler lifestyle?
Once you have the answers to these questions, then you can begin to build a timeline for your retirement. Remember, it’s not about when the Jones’ next door will retire (and whether you will be able to keep up with them), it’s about when you can or will retire based on factors ranging from physical, emotional, and financial.
Contact a Retirement Planning Professional Today
If you are living in Howell, NJ, and want to begin planning for retirement or if you are near or in retirement, it is important to hire a Howell retirement planner you can trust. As a fee-only CFP® and fiduciary, we build successful, productive long-term relationships with our clients through unbiased, objective financial advice. Contact Zynergy Retirement Planning today to learn more!