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Do You Need a Financial Advisor After You Retire?


Managing your money never entirely stops, especially since retirement means living exclusively off of your assets and investments. That said, your involvement with your money can change considerably. After a life spent actively building your portfolio, choosing assets and trying to grow it, in retirement, you begin to draw down from that account. You might want to minimize volatility as much as you can, aiming for a fire-and-forget approach to investing, while other retirees may want to continue pursuing as much growth as they can get. Here is how you can think about working with a financial advisor after retirement.

What Does a Financial Advisor Do For You?

A financial advisor helps you with a number of financial matters so that you can prepare for and live the retirement life you want. While a full discussion of this issue is beyond the scope of this article, a financial advisor is a professional who helps you with money management overall. The details of this are based on the needs of any given client. By and large, however, a financial advisor will help most clients with a few overall goals:

Depending on your needs and your advisor’s services, a financial advisor might help you with accounting services as well. For example, a standard financial advisor will help you make a strategy to maximize your tax advantages. Some financial advisors will also employ an accountant who can do those taxes for you each year.

But overall, financial advisors are about the big picture. For most people, the main relationship they have with a financial advisor is helping them set up and manage their retirement fund. This is why many people view this as a sunsetting relationship. Once you are financially ready to retire, as some people see it, your financial advisor has finished their biggest job.

How Your Finances Change In Retirement

do i need a financial advisor after retirement

For most households, the profile of retirement is a shift from income management to wealth management. In other words, you no longer actively earn new money regularly. Instead, you live off a portfolio of savings and assets that you built up over the years.

Beyond this, retirement comes with an entire basket of its own financial considerations and concerns. Most households no longer have dependents, so at retirement age, it’s unlikely that you will have to worry about caring for minor children, college tuition or elderly parents. However, you will need to begin planning for your own long-term expenses.

In particular, a few financial concerns are common to retirement, which include:

  • Growing healthcare expenses
  • Potential long-term or residential care costs
  • Increased costs of living against largely fixed-income
  • Sequence risk (that is, having to withdraw assets in a down market)
  • Life expectancy portfolio duration
  • Estate planning

Now, again, these aren’t issues unique to retirement, nor will every retiree have to manage them. But they are common.

The core issue surrounding finances in retirement is flexibility. Once you shift from earning new income to living off your portfolio, it becomes much harder to change your financial footprint. In your working years, it’s much easier to recover from an unexpected expense or save up toward a new goal. In retirement, that’s more difficult. Managing this is critical to a successful retirement.

Do You Need a Financial Advisor In Retirement?

The answer is, it depends. As we discussed above, many people think of their financial advisor as someone who helps them save up for retirement. Once they retire, in this view, the advisor’s job is done.

This can be more or less true depending on how you have structured your portfolio. For example, a retiree might build an entirely income-based portfolio, one built entirely around generating payments from annuities and long-term bonds. This retirement account would function like an indefinite income and would need much less management in retirement as a result.

On the other hand, a retiree might have a portfolio built around capital assets. This portfolio would likely capture more growth during retirement, but since it would only generate money by selling assets the portfolio would need much more active management.

The nature of your portfolio can go a long way toward determining the importance of ongoing advice. A portfolio that needs more active management will generally benefit from more advice in retirement.

Beyond that, a good way to consider this is cost. Can you afford to continue working with your financial advisor? If so, this is probably a good relationship to maintain. Many of the issues around day-to-day finance will only get more important in retirement, as budgeting gets more important without new income coming in the door.

The simple truth is that financial planning for the future never stops. If you can afford it, professional help can make that process much easier.

Bottom Line

do i need a financial advisor after retirement

Most people think that their financial advisor’s job is done once they help them retire. In fact, it’s often just getting started as you’ll still have plenty of financial decisions and investments to make. As you try to navigate the financial ups and downs of retirement it could be just as important to have an advisor at your side as it was when you were working and preparing for the big change.

Financial Advising Tips

  • Getting help to manage your money can be important when you’re thinking about retirement. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three 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.
  • Don’t forget that your financial advisor is key to helping you set up that retirement account in the first place.

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