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Retirement is a major life change and it often raises questions about managing money during this stage. Some people feel comfortable handling their finances on their own, but others may find value in working with a financial advisor. The right advisor can help you create a plan to and support your financial needs and make your retirement savings last.
Do You Need a Financial Advisor After Retirement?
Retirement marks a significant transition from a regular paycheck to relying on savings, investments and possibly pensions or social security. As a result, many retirees find themselves overwhelmed when dealing with complex financial decisions. And this change often brings new financial challenges.
Retirees, for example, need to plan withdrawals from retirement accounts, cover healthcare costs and adjust to lifestyle changes.
A financial advisor can help you create a strategy for managing required minimum distributions (RMDs), coordinating income sources to reduce taxes or estimating how long your savings might last.
Some advisors may also offer limited support if you prefer to handle most tasks yourself but want guidance on decisions like when to claim Social Security or how to rebalance your investment portfolio.
Understanding the Financial Needs of Retirees
Retirees typically draw income from Social Security, pensions and personal savings to support their lifestyle. Reviewing these sources along with expected expenses can help you track whether you are likely to meet future needs.
Healthcare is one area that can lead to rising costs over time, making it important to plan for medical and long-term care expenses. Estate planning is also key, as it helps direct how assets will be handled and passed on.
How to Find a Financial Advisor as a Retiree
Finding a financial advisor as a retiree involves several steps. Start by identifying what specific services you need, such as investment management, tax planning or estate planning. Then, to narrow your search, look for advisors who specialize in retirement planning.
When searching for a financial advisor, it’s important to research their credentials and experience. Certified Financial Planner™ (CFP®) or Chartered Financial Analyst (CFA) designations indicate a high level of expertise and commitment to ethical standards. A Certified Retirement Financial Advisor (CRFA) offers a background in long-term financial planning. Always check the Financial Industry Regulatory Authority (FINRA) or the Securities and Exchange Commission (SEC) for any disciplinary actions or complaints before working with a new advisor to verify that they have a clean regulatory record.
Personal compatibility is another key factor when choosing a financial advisor. You should feel comfortable discussing your financial situation and goals openly with your advisor. A good advisor will take the time to understand your specific circumstances and tailor their advice accordingly. Building a trusting relationship with your advisor can lead to more effective financial planning and a more secure retirement.
Tips for Finding the Right Financial Advisor
As a retiree, an advisor focuses more on managing withdrawals, preserving savings and coordinating income sources, rather than building wealth through ongoing contributions. Here are six tips to help you choose an advisor who fits your needs after retirement:
- Find a retirement specialist: Retirement planning requires a unique set of skills and expertise. Look for someone who works with retirees or pre-retirees and understands retirement income strategies, tax planning, healthcare costs, and estate planning.
- Know how they get paid: Financial advisor fees can vary, such as a percentage of assets under management, a flat fee, or an hourly rate. You need to understand how this will align with your budget. Additionally, consider whether the advisor’s fees are transparent and if they disclose any potential conflicts of interest.
- Understand their investment philosophy: Find an advisor whose investment philosophy aligns with your risk tolerance and financial goals. Ask potential advisors about their approach to investing and how they develop investment strategies for retirees.
- Ask how they manage withdrawals. A retirement advisor should have the expertise to help you create a plan for when and how to withdraw from different accounts—like IRAs, 401(k)s, or taxable investments. This strategy could help minimize your retirement taxes and make your nest egg last longer.
- See if they help with Social Security and Medicare decisions. Advisors who offer guidance on when to claim Social Security or how to budget for Medicare premiums and out-of-pocket costs can add extra value to your plan.
- Check if they offer ongoing support. Some advisors provide one-time plans, while others offer regular reviews and adjustments. Choose the option that works best for your situation.
Examples of Retirement Portfolios for Retirees
As a retiree, you will often want to shift your focus to retirement income, stability and limited growth. Depending on your specific finances, your may be to cover living expenses, manage risk and preserve savings over time.
Unlike portfolios for younger workers, retiree portfolios are usually more conservative, with a greater share in income-producing and low-volatility investments. A balanced approach can still include some growth assets to help combat inflation, but withdrawals and steady income become the focus.
The table below breaks down an example of a portfolio allocation that a financial advisor might create for a retiree.
| Asset Class | Allocation | Purpose |
|---|---|---|
| Bonds (municipal, corporate, Treasury) | 40% | Provides steady income and reduces overall risk |
| Dividend-paying stocks | 25% | Offers income and moderate growth |
| Cash or short-term investments (CDs, money market) | 15% | Covers short-term needs and emergency expenses |
| U.S. large-cap equities | 10% | Offers some growth to help offset inflation |
| Real estate investment trusts (REITs) | 5% | Adds income from property investments |
| International equities | 5% | Diversifies risk and provides some growth potential |
As you can see in the table above, the sample portfolio allocates 40% to bonds for steady income and reduced risk, 25% to dividend-paying stocks for income and moderate growth, and 15% to cash or short-term holdings to cover near-term expenses. A smaller portion of 10% is held in U.S. large-cap equities to help with long-term growth, while 5% is allocated to real estate investment trusts (REITs) for property income and another 5% to international equities for added diversification.
This mix is designed to provide income and stability while maintaining some exposure to growth to support a long retirement. But, your asset distribution could change in the table below, if you rebalance to focus on a longer life expectancy.
| Asset Class | Original Allocation | Adjusted Allocation (Longer Lifespan) | Why It Might Change |
|---|---|---|---|
| Bonds (municipal, corporate, Treasury) | 40% | 30% | Reduced to make room for more growth-oriented assets |
| Dividend-paying stocks | 25% | 30% | Slightly increased for income and moderate growth |
| Cash or short-term investments | 15% | 10% | Lowered to avoid excess idle funds with low return |
| U.S. large-cap equities | 10% | 15% | Increased to support long-term growth |
| Real estate investment trusts (REITs) | 5% | 5% | Held steady for diversification and income |
| International equities | 5% | 10% | Increased to enhance growth and diversify market exposure |
For this second example, I financial advisor might recommend that you adjust your portfolio by reducing your bond allocation from 40% to 30% to allow for a larger share in growth-focused investments. Dividend-paying stocks here increase slightly from 25% to 30% to provide income along with moderate growth. Cash or short-term holdings are lowered from 15% to 10% to reduce funds earning little return. U.S. large-cap equities rise from 10% to 15% to help the portfolio grow over time, while international equities double from 5% to 10% to add growth and global diversification. The REIT allocation remains at 5%, continuing to provide income and property exposure.
This shift balances income needs with the goal of making the portfolio last over a longer retirement period.
Bottom Line
Finding a financial advisor as a retiree starts with understanding your financial goals and identifying advisors who are equipped to support them. Looking at factors like retirement planning experience, how the advisor charges fees and how well they communicate can help you choose someone who fits your needs. The right advisor can guide you through the financial decisions that come with retirement and help you manage your savings with confidence.
Retirement Planning Tips
- A financial advisor can help you mitigate risk for your portfolio. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you want to know how much your nest egg could grow over time, SmartAsset’s retirement calculator could help you get an estimate.
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