Finding a trusted advisor to help you prepare for retirement just got a little easier. The Biden administration said in late April that it announced new rules that would “require more financial professionals to hold themselves to higher standards when providing financial advice on retirement benefits.” new york times. “From September 23, investment professionals who act as trusted advisors will be required to act as fiduciaries when a client pays them for advice on individual retirement accounts. A bucket of 401(k) and similar tax-advantaged dollars.”
This can help reduce potential conflicts of interest and ensure that your advisor is working in your best interest, but be sure to vet the professionals you entrust with your retirement planning. remains important. After all, these are the golden years you are preparing for.
Where can I talk about retirement planning?
Although it is possible to plan for retirement on your own, many people find it helpful to get advice.
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If you need a little guidance, he says, “If you're planning for retirement through your employer, they might offer free seminars or classes on retirement planning.” CNN Money. Additionally, “many 401(k) plans also offer different types of advice and guidance, ranging from tools and calculators to help you plan.”
If you want more personal guidance, you also have the option of hiring a retirement advisor. Basically, it says, “This is a financial expert who helps you plan and manage your finances for and after retirement.” forbesHowever, technically speaking, the “broad” term “includes many different types of financial professionals, including financial advisors, certified public accountants (CPAs), certified financial planners (CFPs), and investment managers.”
How do I find a retirement advisor I can trust?
Start by narrowing down what you are looking for in an advisor. According to Forbes, there are “advisors who provide general financial advice and advisors who specialize in specific aspects of retirement planning,” so if you know you need help in a specific area, If so, look for an advisor with relevant expertise.
It's also helpful to familiarize yourself with the many credentials an advisor can have. Hold a qualification such as “CFP (Certified Financial Planner), PFS (Personal Financial Specialist), or CFA (Certified Financial Analyst)'' that “actually requires a considerable level of knowledge before obtaining the designation.'' You can focus your search on advisors. ),” Said CNN Money. This at least ensures that the advisor has a “demonstrated level of competency in financial planning and investing.”
To find a specific advisor, you can ask people you trust with similar financial circumstances, or “visit the Financial Planning Association, where you can search for planners by location or specialty,” CNN said.
Once you have identified several possible options, interview at least a few of them. This “gives you an opportunity to compare qualifications, experience, fees, and other factors,” and “helps you understand each person's preferences,” says Forbes. Look at their personalities and see if they are someone you can work with long-term. ”
It's also important to do your own research, ask for references, and check what your advisor has to say.
What should you consider when choosing a retirement advisor?
There are several things to consider when deciding which advisor is right for you.
- Are they trustees? Trustees “must follow strict rules of conduct and avoid conflicts of interest.” This “means that advice affecting remuneration cannot be provided unless certain conditions are met to ensure the protection of investors,” the Times said.
- Do you understand the costs and can you afford them? It's important to fully understand how your advisor makes money and how they plan to charge you. As for how much to spend, “it depends on your budget, your assets, and the level of financial guidance you need,” he said. Nerd wallet.
- Do they have a clean background? Before engaging an advisor, “always review the credentials the advisor claims to have and check for disciplinary issues such as fraud,” NerdWallet said. To do this, search for Form ADV and visit FINRA. broker check Website.
