How to Know When It’s Time to Hire a Financial Advisor

You’re Going Through a Significant Life Transition

Life has a way of making you comfortable — and then it changes. 

Having a financial advisor can help you successfully navigate changes with your money, often empowering you with confidence and a sense of well-being. 

One of the biggest financial (and life) transitions is retirement. Everything changes: from how you get paid to the way you pay taxes to how you live your life. 

Frighteningly, the U.S. Census Bureau reports that 49% of those ages 55 to 66 have no retirement savings, showing just how unprepared many are for this critical transition. 

That said, an advisor can make the process more understandable and transparent, especially if you are nearing retirement age and feel you are scrambling to prepare. 

Some key questions your advisor can help you address include:

  • How will your financial needs change in retirement? 
  • How much money should you save to meet your retirement needs?
  • What is the best healthcare coverage option for you? 
  • When should you start taking Social Security distributions? 
  • How can your finances empower your retirement dreams?
  • Do you have an updated estate plan?

Retirement can be one of the most exciting yet intimidating life transitions. Abacus financial advisors are well-versed in retirement strategies and can help you create a plan that gives you a sense of security and confidence as you enter your golden years. 

Another significant life change is divorce. When you separate from a partner, there are many questions to be answered about your finances. You must protect your assets, start building financial independence, and plan for a different and separate future. 

You may also experience the death of a partner. Working with a financial advisor through this passage of life, one who can help guide you with your money concerns, can often make the burden of grief a little easier to process.

Transitions in life can be jarring, but a financial professional can help ease pressure so you navigate your life changes more smoothly and be more informed. 

You Have a Lot of Cash You Don’t Know What to Do With

You might think there’s no such thing as having “too much” cash, but it’s not necessarily true. 

Cash is a wonderful tool to protect your wealth and help you accomplish short-term goals. There are many reasons to have a significant amount on hand, including using cash for:

  • An emergency fund
  • Down payment for a house
  • Family vacation
  • Important life events 
  • Medical expenses
  • A new car

However, if most of your wealth is in cash, your money likely isn’t growing enough to maximize your future. As one example, even though savings rates are increasing, those rates are still not enough to keep pace with inflation, especially long-term. 

This is why investing is the next logical step. Your advisor can help you set up an investment strategy that looks at your risk tolerance, risk capacity, allocations, taxes, time horizon, and how your values inform your goals. 

Say, for example, you are in your 40s and still have several decades before retirement. Your financial advisor may recommend maxing out Roth IRA contributions or investing money in a highly diversified, less volatile stock option like an ETF or mutual fund. 

If you’re on the brink of retirement, they may recommend a dividend stock since those offer a regular cash payout which can contribute to retirement income.

Whatever the case, most experts recommend you invest 15%-25% of your post-tax income. 

Your financial advisor can help you create a well-balanced portfolio that allows your money to be maximized instead of earning peanuts in a savings account. 

Your Wealth is Nearing $1,000,000

First, congratulations! This is a huge accomplishment and you’ve put in the work.

That said, more money tends to breed more complexity. If you want to enjoy your wealth rather than spend time figuring out the complexities of the financial system, an ongoing relationship with a financial advisor can help you effectively manage your wealth.

When dealing with large amounts of money, advisors can offer strategies to:

  • Mitigate your tax liability
  • Establish a charitable giving strategy
  • Manage and consolidate investments
  • Create a thorough estate plan

Whatever your needs, an Abacus advisor will not only help create a clear path to manage your wealth, but they will do so in ways that align with your personal core values. 

Not Quite Ready to Hire an Advisor? You Can Still Be Proactive

Even if you don’t feel like you need professional advice right now, there are still productive ways to be a good steward with your money. 

Perhaps it’s too anxiety-provoking or you dislike financial jargon and just want to find out a few of the basics. 

Abacus has created a free Beginner Finance Workshop that offers simple, straightforward ways to better manage your money. 

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