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When Should You Hire a Retirement Specialist?


Retirement presents special challenges, financial and otherwise, to retirees. Fortunately, they don’t have to face those challenges alone. Retirement specialists are financial advisors who focus on counseling retirees and those approaching retirement about the best way to use their current and future assets to live comfortably after their working years are over. Consider hiring a retirement specialist to help you plan for the time after you finish working.

For general guidance on how to handle your investments, a financial advisor can offer valuable advice.

What Is a Retirement Specialist?

“Retirement specialist” is a term used by many financial advisors but there is no specific industry certification by that name. Advisors who describe themselves as specialists in retirement may spend much of their time making recommendations to clients about retirement-related matters.

However, a genuine specialist in retirement may have some skills that the typical financial advisor, even including one self-described as a retirement specialist, does not have. A good time to think seriously about hiring a retirement specialist is when your regular advisor doesn’t have answers to questions about retirement.

Retirement Specialists vs. Other Types of Financial Advisors

Helping clients accumulate and grow portfolios of investments is a major focus of many financial advisors. However, retirement specialists have a somewhat different take on investing. Rather than seeking capital appreciation, they emphasize capital preservation. And rather than chasing growth, they are likely to be more concerned with investments that provide a stable source of income to clients past their wage- and salary-earning years.

Tax planning is also different in retirement. Retired people may have more options to manage their taxes than working people. And because many retired people have built up their nest eggs in tax-deferred accounts such as IRAs and 401(k) accounts, it’s important to carefully plan the timing and size of withdrawals from these accounts in order to manage taxes.

Retirees past age 70.5, or 72 if they were born after June 30, 1949, must make a required minimum withdrawal (RMD) from their tax-deferred retirement accounts every year. Accounting for the impact of these mandatory withdrawals is an important part of a retirement specialist’s duties.

Social Security is the most significant source of income post-retirement for many Americans, so a retirement specialist devotes considerable attention to maximizing Social Security benefits. Deciding when to start receiving Social Security payments can have a major effect on the size of the monthly payments, and making the decision requires that the retirement specialist and client consider a number of factors, from life expectancy to alternative sources of income.

Paying for healthcare costs in retirement is another important concern. Retirees generally become eligible for Medicare coverage at age 65 and need guidance from a retirement specialist about Parts A, B, C and D of the national single-payer health plan for seniors.

If workers retire before age 65, they normally won’t be eligible for Medicare immediately and the health benefits from their former employer may lapse. A retirement specialist will be able to provide advice on selecting private health insurance to cover the gap.

Long-term care is another concern. Most expenses for long-term care, whether at home in a nursing home or assisted living, are not covered by Medicare. A retirement specialist will be able to assist the client with assessing the role potentially played by long-term care insurance.

Estate planning and housing needs are two more retirement concerns that a retirement specialist will be able to address. Decisions about whether a retiree will age in place in his or her own home or reside in a retirement home of some kind will be affected by financial capabilities as well as personal preference. Homes may need costly renovations or serve as assets themselves, through reverse mortgages. Retirement specialists can assist with these sorts of issues.

Hiring a Retirement Specialist

When Should You Hire a Retirement Specialist?

Selecting a retirement specialist calls for the same due diligence as selecting another sort of financial advisor. Personal referrals, industry experience and professional certifications all may have parts to play in identifying and choosing a retirement specialist. Asking about specific topics can help identify an advisor with value to add in retirement. Here are topics to ask retirement specialist candidates about:

  • How would the asset allocation in my portfolio change pre- and post-retirement?
  • What strategies are available for exiting an IRA?
  • How can I best withdraw funds from my retirement accounts to minimize taxes?
  • When is the best time for me to start claiming Social Security benefits?
  • Can you explain Medicare Part A, B, C and D and how I can use them?
  • Can you make recommendations for long-term care insurance?

An advisor strongly focused on retirement may have in-house expertise in all these areas. One less interested in specializing in retirement may refer a client to a third-party supplier. This could be as an insurance broker for long-term care coverage or a CPA for tax planning.

Bottom Line

A retirement specialist has specific competencies that a more general financial advisor may lack. Shifting portfolios from accumulation to capital preservation, drafting income strategies, managing taxes, providing for healthcare costs and other matters of importance to retirees and those approaching retirement are areas where a retirement specialist can speak authoritatively.

Tips on Retirement

When Should You Hire a Retirement Specialist?
  • If you’re approaching retirement, you may find the advice of a financial advisor helpful. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • The annual payment you receive from Social Security is based on your income. It’s also based on your birth year and the age at which you elect to begin receiving benefits. SmartAsset’s Social Security calculator can give you a quick estimate on what your benefits will be.

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