How do financial advisors help with retirement planning?

Last updated on 28 September 2023

Older couple walking on the beach together
If you want peace of mind in your retirement, then engaging a financial planner is the best choice you can make beforehand. [Source: Shutterstock]

Key points:

  • Retirement planning is a vital service that financial advisors can provide to older people
  • A certified financial planner will evaluate your current financial situation and assist you in reaching your goals in retirement as best they can
  • Education and empowerment is an important part of financial planning services

Planning for your retirement is a really important step to make sure you are financially prepared for this next stage in life. Many people don’t plan for their retirement, fiscally or lifestyle-wise, and it can leave them unprepared for what retirement can be like.

The earlier you get help from a financial advisor or start planning for your retirement, the more likely you will be in a better position to retire.

Approaching retirement

Some older people view retirement as just something they step into, as if they will suddenly be sipping cocktails on the beach the second they leave work.

In reality, there is usually a process of transitioning into retirement, and those who don’t plan for an easy transition end up having a hard landing.

Financial advisors recommend to start thinking about your retirement and what that might look like as early as possible before you retire. However, a lot of people approaching retirement only start thinking about their retirement plan in their mid 50s, which doesn’t give them a lot of time to figure out where they are at financially or what they need to do to help them reach their financial goals.

When you are about to enter retirement, you want to feel confident that you have a strong retirement plan that is well thought out, approved by a financial advisor, and reflects your financial situation.

The best time to at least start considering your financial plan is in your 40s or early 50s. This gives you adequate time to hire a financial advisor, see what financial products might fit in well with your financial strategy, and gives you a good chunk of time to focus on wealth growth.

As they say, “The early bird gets the worm”. And this couldn’t be truer when planning for your retirement.

Even if you just organise an introductory meeting with a financial planner to get an idea of your financial situation for retirement can put you in a better position for understanding your retirement position.

Financial advisors and retirement planning

Retirement planning is one of the main service offerings that financial advisors can provide to their clients. It is an important and big market for financial experts.

You can definitely be assured you will be able to find a financial advisor with the expertise to assist you on your retirement planning journey. There are some financial advisors who exclusively focus on offering retirement financial planning only.

A financial advisor will evaluate your personal finances, look at your long term goals, investigate your potential need to access the Age Pension, and then provide a personalised financial program or professional advice on how to best organise your retirement plan.

Managing your own finances and figuring out a plan can be really confusing, which is where a financial planner can step in.

They can provide you clarity on what steps you can take to secure your retirement.

The analysis may include:

  • Your personal situation, like when you aim to retire, your current age, and your personal relationships
  • Any assets you have, such as if you own a home, your savings and super, and any investments
  • Will you be entering retirement with debt? How much is the debt and what type – mortgage or credit card debt?
  • What income avenues you have, which can include current work salary, any Government financial assistance, and investments
  • Do you have a solid estate plan in place? For example, an Enduring Power of Attorney, Advanced Care Directive, or Will.

A financial advisor will likely request a financial budget, maybe a fortnight or month long, from you to gauge your spending habits.

Another important consideration is to have a general idea of what retirement will look like for you. If you can adequately explain what you want your retirement to look like to your financial advisor, they will be in the best position possible to help you achieve your goals.

What financial advisors can assist with

There are a number of services financial advisors can provide that will assist older people when planning for their retirement. Including:

  • Educate and empower you, the client, to make good financial retirement decisions about your future and have as much financial freedom as possible
  • Showcase different ideas that can help you achieve your goals in retirement
  • Track your financial progress and if you are meeting your goals, as well as help shift the goalposts if something happens or changes
  • Use different financial strategies to grow your wealth and savings, reduce your debt, or help you access benefits before you reach retirement
  • Identify any risks or opportunities you need to consider financially
  • Ensure there are financial protections in place for you and your loved one
  • Make you aware of other considerations for retirement, like potential future health or aged care needs

If you decide to plan for your retirement without any help, you may end up losing out in areas that a financial advisor is more knowledgeable about, such as special benefits or tax cut opportunities.

Importantly, finances can be a really emotional subject for people. For some, it can be stressful, cause anger, or even sadness. A financial advisor is balanced, impartial, and can make sure none of your financial decisions are made out of emotion.

If you want peace of mind that you are prepared for retirement, then visiting a financial planner is the best choice you can make before you retire.

Disclaimer: The information on this site is general in nature and does not constitute legal or financial advice. Readers should seek their own personal legal and financial advice from a suitably qualified practitioner.

How are you putting together your financial plan? Tell us in the comments below.

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