Photo courtesy of First Interstate Wealth Management
When the topic of financial planning comes up, many people assume it only applies to those who have significant wealth or assets. Financial planning has benefits for everyone, especially for those who want to make the most of their hard-earned savings.
Every stage in life has its own set of priorities. Financial advisors not only help determine how to meet those more immediate obligations, but they can also provide direction on how to prepare for those further down the road, from getting ready for retirement to leaving a modest legacy for the next generation.
According to Ted Ray, wealth advisor at First Interstate Wealth Management in Colorado Springs, taking a long view of finances can provide some peace of mind as people move through life’s changes. Here are just a few ways financial advisors can help ease major transitions:
Deciding when to retire
Entering retirement is a big step, and one common concern is that these golden years will outlast savings. With assistance from a qualified financial advisor, individuals can get a professional opinion on their situation and receive guidance on avenues to grow retirement savings and investments, if needed, as well as insight on how long savings should last. Financial advisors will take into account major expenses — like health insurance and medical or caretaking — that could draw down savings faster than aspiring retirees anticipate.
With more information at hand, individuals can better determine when they can retire. They can also get a better idea of when to draw on investments and Social Security to realize the best possible tax benefit and to maintain the standard of living they desire.
Balancing consolidation and diversification
Individuals are often bombarded with seemingly conflicting advice, such as being advised to diversify on one hand and urged to consolidate on the other. Advisors can help clarify the nuances and offer guidance on how to balance these buzzwords.
For instance, individuals may wish to consolidate certain accounts at one financial institution to simplify recordkeeping and manage fewer adviser relationships. Within their accounts at that financial institution, however, it may be wise to diversify how funds are allocated. If significant resources are in retirement accounts, a financial advisor might help diversify those funds among different asset classes and sectors to provide some insulation from dramatic market swings and seek protection of principal.
Preparing for transferring wealth
No matter which income bracket someone falls into, it’s important to have a plan for how to distribute assets, whether they are in the form of property, investments, or savings. A seasoned financial advisor should be able to take individuals through an inventory of their assets and provide guidance on how each is titled. Some elements of an estate, such as a home, life insurance or retirement savings, could be distributed outside of a will depending on how ownership and beneficiaries are designated.
It’s important to review ownership of assets to ensure that titles are consistent with how an individual would like them distributed after their death. Additionally, given their experience in handling financial matters through life’s cycles, advisors may have experience working closely with reputable and local estate planning attorneys who can be of further assistance.
Getting started with financial planning
Financial planning can provide individuals and families with a clear roadmap in hand, which can help them feel more confident about reaching their long-term goals. Getting started is as simple as making an appointment with a local advisor, like First Interstate Wealth Management, that offers wealth management services. For more information on First Interstate Wealth Management’s services, follow this link or reach out to Ted at [email protected].
