15 Essential Questions to Ask a Financial Advisor When Planning Your Retirement

Looking for a financial advisor to help you with retirement? Sometimes it feels even more difficult than shopping for a house or a car. Learning how to make money to get your head around it can be daunting.

However, a few simple questions can help you decide if your financial advisor is right for you. Here are 15 of the best questions to ask a potential financial advisor.

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1. What is your financial philosophy?

Money is a personal matter, and I hope you have a relationship with your financial advisor that lasts for years to come. Therefore, it is important that you decide if you are a good ideological fit.

It’s okay if your philosophies differ slightly – this could be a learning opportunity for you – but in order to trust your advisor, you’ll want to be on the same page about some important things .

2. What services do you provide?

Different financial advisers offer different things. If you need specific services, make sure the consultant can deliver. Depending on your needs, you might ask about:

  • Tax planning

  • Insurance cover

  • Budgeting council

  • Estate planning

  • Debt management

  • Retirement planning

3. What professional credentials do you have?

All financial advisers will have special qualifications. Look for respected industry designations such as Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA).

To sell or recommend specific products, the advisor may be required to pass licensing examinations by the Financial Industry Regulatory Authority, commonly known as FINRA. He or she probably also needs to be registered with the state.

4. Who is your typical client?

Look for an advisor who has experience with clients in situations similar to yours. For example, if your focus is retirement planning, make sure your advisor has a history of helping clients plan for their golden years.

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5. Are you confident?

Some people prefer to make sure their financial advisor is a fiduciary. This means that the adviser is legally bound to always act in your best interest.

There are many untrusted advisers who do good ethical work. However, choosing a fiduciary can give you extra peace of mind.

6. How do you make money?

Financial advisors can use a wide variety of payment structures. If you choose an advisor who makes commissions, he or she may steer you into a product that is not best for your needs.

Instead, you may want to choose a consultant who will charge you a fee for services. If you choose a fee-only financial advisor, find out if this fee comes down to a percentage of your assets, or if it is a flat fee.

7. Will you provide details of your fees in writing?

If you want to be extra careful, ask your financial advisor to provide a written list of all fees and expenses. This way, you can avoid any unpleasant surprises. Your financial advisor should understand your desire to be “better safe than sorry.”

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8. How will we communicate with each other?

Communication is a big part of any professional relationship. This is especially true when it comes to money. So, make sure you are comfortable with the counselor’s communication style.

Will your financial advisor mainly call you, or will you receive messages by email? Or, your counselor may prefer to meet in person. Find out and make sure it fits your communication style.

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9. How much money do I need to retire?

For most people seeking financial advice, this is the golden question. There is no “right” answer here, as experts have many different theories. But your financial advisor should be able to give you a rough ballpark estimate, and then explain how he or she arrived at that number.

Do you have other personal financial goals that you need to align with the retirement goal? Your financial advisor should be able to help with that too.

10. When can I expect to retire?

Now that you know how much money you’ll need to retire, it makes sense that you’ll want to know when you’ll be able to get there.

There is no precise answer to this, since future returns are unknowable. But your financial advisor should be able to tell you what your retirement timeline looks like based on your own particular situation

11. When should I file for Social Security?

Deciding when to file for Social Security benefits is challenging, as the age you choose will affect the size of the monthly check you receive. It’s easy to get general advice online, but your financial advisor should be able to make a recommendation that fits your needs and goals.

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12. Do you offer any educational resources?

Different people will have different opinions on how involved they want to be with their financial advisor. If you’re someone who wants to learn as you go, ask potential financial advisors about what they offer in terms of educational content.

13. What kind of taxes can I expect to pay when I retire?

Some people fail to account for taxes in their retirement plan, which leaves them with a nasty surprise later. Your financial advisor can help you prepare for the taxes you will face in retirement.

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14. What do you think are the biggest risks before my retirement?

One of the most impactful parts of financial planning is accounting for risks so you can create contingency plans. By asking an advisor about the risks you face, you will get a sense of how closely the advisor pays attention to the current financial landscape.

If you’re putting responsibility for your retirement in the hands of an advisor, you want to make sure he or she has a keen eye for current and future risks.

15. What will we do if I am not achieving my goals?

In a perfect world, every financial advisor would provide a guaranteed plan to help clients achieve their goals. However, the world we live in is not perfect.

Your financial advisor should be able to offer you transparency about what he or she will do if you fail to meet our financial goals.

Base line

If you’re not sure where to start on your financial advisor journey, you can find a wide variety of reviews online. However, it’s not a bad idea to ask your friends and family for their personal experiences – sometimes, direct recommendations are the best way to point in the right direction.

When you find the right professional, you’ll have expert help to save for retirement, learn how to eliminate financial stress, and achieve your other financial goals as well.

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