When you’re in your 20s and 30s retirement probably seems like it’s far away. Time goes by quickly, though, and you want to start your retirement planning early to provide yourself with the best opportunities. Because retirement accounts need time to grow, the sooner you begin yours the more growth you’ll see.
Decisions you make at a younger age can have a significant impact on your long-term financial security, and a retirement advisor can give you good information about how and where to invest. That will allow you to see your chances of security and a good retirement continue to build, which increases peace of mind and reduces financial worry.
Working with a financial planner to increase your potential retirement income is a great option, but it’s up to you to take the first step. That starts with understanding the value of financial planning and the options you have for investment strategies and retirement plans. Here’s what you need to know.
Why Start Planning for Retirement In Your 20s and 30s
When you create retirement accounts and investment portfolios at a young age you can take advantage of early planning to improve your financial life for the future. For example, you’ll be able to leverage the power of compound interest.
This means you’ll earn interest on the principal amount you’ve put into your investments, but also on the interest you’ve already earned. Because of that the interest begins to “compound” and that causes the total balance to rise faster. The value of your retirement savings can grow more rapidly and continue to do so when you start early and use savings and investment vehicles that offer compound interest.
Another benefit of starting on your retirement goals early is the ability to take on more investment risk. When you’re close to retirement you don’t want to have risky investments that could be volatile, because you need that money and are about to start using it. But when you’re young you can afford some larger losses here and there, with the idea that you’re also likely to see bigger gains.
Additionally, you’ll be able to develop strong financial habits over time, which can improve your financial situation over the course of your life, not just in retirement. Financial advisors are for more than just retirement planning, as they can work with you in a lot of other monetary areas, as well. An advisor can help with tax planning, asset allocation, insurance products, long term care planning, and more.
When you find an advisor and focus on wealth management at a young age you can create a strong retirement account to rely on in your later years, so you aren’t limited to only social security benefits for paying bills or enjoying hobbies. In short, securing a financial planner at a young age can help build a solid foundation for retirement.
It’s important to note that investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Still, quality financial products and trusted brokerage services have helped many people with their retirement plans and dreams.
Factors to Consider in Choosing a Financial Planner for Retirement
When you’re specifically working with financial professionals for investment management solutions geared toward retirement, you’ll want to look for a chartered retirement planning counselor or a retirement financial advisor. Why? Because they have the specific type of experience that can help you meet your goals and focus on your plans.
Credentials, experience, specialization, and alignment with your long-term goals should all be areas for you to consider, along with any other factors that relate to your specific situation. A general financial advisor can be very helpful, but a retirement-specific one is a great choice to increase your chances of getting where you want to be financially by the time you retire.
Make sure you ask any retirement advisor you’re considering some important questions to help make your decision. These should include information about specific areas such as:
- Credentials and Certifications: It’s important to choose a Certified Financial Planner (CFP) or a fiduciary advisor. By doing this you know the person you’re trusting with your retirement income is properly certified to manage that money and advise you on growing and protecting it. Because your retirement savings is extremely valuable you don’t want to take the chance of it being mismanaged by someone who didn’t have the credentials to care for it the right way.
- Experience in Retirement Planning: When you’re talking to financial advisors be sure you ask them about their retirement advisor qualifications. If they only have experience managing other types of financial goals they may not be right for you. Retirement advisors often specialize in their area and are careful financial planners who understand how to build wealth for the long-term interests of their clients, as well as moving that wealth toward less-risky investments over time.
- Fee Structure: Understanding what kinds of fees you’ll be asked to pay matters. There are generally two types of financial advisors when it comes to how they charge. These are fee-based and commission-based planners. A fee-only planner will receive a set amount for their services, while a commission-based planner will be paid based on your level of assets or the amount of money they make for you. Both of these options can work, but they’re handled differently and you want to be sure you know what to expect.
Ready to get started on your retirement plan with certified financial planners you can trust to protect and grow your retirement money? Get matched with a financial advisor today and start feeling more confident about your retirement and estate planning goals. The right advice from a trusted professional can go a long way toward helping you make informed decisions and offering you peace of mind.
What to Look for in a Financial Planner for Retirement
There are a lot of financial planners around, and you don’t want to choose one who doesn’t have the skills you’re looking for, or one you just don’t “click” with. Once you have a list of potential candidates, meet with them and ask some questions. Do they have an annual fee? Do you have enough assets to get started with them? How long have them been managing retirement planning accounts?
A personalized approach can be very helpful in an estate planning professional or financial advisor, because it shows that they’ll do what’s in the best interest of their individual clients. Financial planning doesn’t have to feel cold and sterile, especially when you have a retirement advisor who’s personable and friendly.
You’ll also want to look for a retirement financial advisor who understands the unique needs of people in their 20s and 30s. Many people in these age groups are starting or growing families, buying homes, and traveling. No matter what kinds of current plans you have, or where you are in your career or family goal-setting, you don’t want an advisor who doesn’t understand your current savings abilities or financial needs.
Setting realistic financial goals for you is another vital aspect of good retirement advisors. Everyone is different, even if they have a lot of similarities in certain aspects. Your retirement advisor may work with a lot of people who are your same age, for example, or who have the same kind of career. Still, they aren’t you and your retirement plan should be unique.
Your advisor can help you set tax planning goals, address healthcare costs, and save for other areas, along with focusing on overall wealth management and retirement goals to improve your short- and long-term financial situation.
There’s no need to just find an advisor and hope for the best when you have options about which advisor will be best for your income needs and retirement goals. Then, you can make informed decisions about tax implications, potential risks, and the rewards that come from various types of investments.
When you want to find the right advisor for your needs, you can use our free Advisor Match Tool to get started today!
How to Ensure Long-Term Success With Your Financial Planner for Retirement
Once you’ve found your retirement financial advisor and gotten everything set up, you can have more confidence that you’re giving your retirement a good start. That doesn’t mean you’re done, though, because a retirement plan needs maintenance from time to time.
Regular check-ins with your financial advisor can help you catch a problem before it becomes more serious, so you can stay on track for a great retirement. A productive, long-term relationship with your retirement financial advisor is the goal, for better money management and increased peace of mind.
When you regularly review and update your financial plan through your advisor you can both see whether you’re on track to meet the goals you’ve set. Starting in your 20s or 30s gives you some time to make bigger adjustments, but you still want to maximize the value and growth of your retirement accounts. Regular reviews and updates are a big part of that.
Additionally, clearly communicating your goals can make everything flow more smoothly. Then, your advisor can help adjust a more standard plan for someone your age to fit your specifics. You may have more to save than average, or maybe you have less but you’re really committed to growing your retirement. When you talk openly about your goals, retirement advisors have a better idea of how to help you.
Staying adaptable to life changes is another vital component of long-term success with your chosen financial advisor. A marriage, career changes, or a new child coming into your family can all mean changes to your retirement planning. That’s normal and expected, but it’s still important for you to communicate that to your advisor.
Making some adjustments and having flexibility as early as possible is a great way for retirement advisors to give you their best work and the highest chance that you’ll have what you’re looking for in retirement savings as you age. Communicating with your retirement financial advisor is key to any needed updates or changes, to ensure that everyone is on the same page.
Conclusion
The best time to start planning for retirement is as early as possible. You can get good advice from a retirement advisor and manage your money more easily when you’re dedicated to growing your retirement income and understand the time horizon you have to work with. Unfortunately, a lot of people put off saving for retirement, and don’t take it seriously when they’re young.
If you focus on retirement finances in your 20s and 30s, though, and get used to automatically putting money aside for this purpose, you have a higher chance of being able to retire when you reach retirement age, instead of having to work to supplement your social security benefits well into your 70s or even 80s.
When you’re ready to get serious about finding the right advisors or services for your needs, it’s time to take the step of finding a planner who aligns with not only your goals but your financial vision for the future. To find a financial advisor you can rely on, make sure you’re reaching out to certified professionals who have the skills and credentials you’re looking for.
You may need to talk to several financial planning pros before choosing one you feel good about, and there’s nothing wrong with that. How you save for retirement and the person you’re trusting to manage that account as it grows can be two of the biggest decisions for your long-term future.
It’s a big decision, and you should take the time to ensure that it’s being made with care and consideration. Then, you’ll have confidence that your financial and retirement goals are on track, so you can feel more secure about your future.
The information provided on this site is for informational purposes only and should not be construed as financial advice. Invested Better does not guarantee the accuracy or completeness of the information provided. Please consult with a licensed financial advisor before making any financial decisions.
