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What to Know Before Hiring an Advisor for Your Retirement Plan


Financial advisors who offer retirement planning services play an important role in the financial services industry. From devising tax-efficient income strategies to managing investment portfolios with an eye on mitigating risks, these advisors work to ensure that your money lasts through your golden years. However, there’s a lot to consider before settling on a retirement plan advisor to hire, including whether their services align with your needs, how much they charge, their professional credentials, among others variables. And if you need help with your retirement plan, connect with a fiduciary advisor today.

Why Hire a Retirement Planner?

Retirement planning is a critical component of financial security, yet a staggering number of individuals approach retirement with trepidation, unsure if they have amassed sufficient resources to sustain their lifestyle in the years to come.

But planning for retirement is about more than simply working toward a savings goal. Building a retirement plan can be a complex process that requires an individual to make strategic decisions about their investments, sources of income, spending and what they’ll leave to family and friends.

The complexity of preparing for retirement can require a strategic plan, and this is where the expertise of a retirement planner becomes invaluable.

Income and Tax Planning

Retirement planners can take your income needs and tax situation into account as they construct a financial plan for your golden year. They can help optimize income streams through strategic tax planning, leveraging tactics such as Roth conversions and tax-loss harvesting. They can also help retirees calculate how much they can afford to withdraw from their retirement accounts on a regular basis, as well as plan for required minimum distributions (RMDs).

Portfolio Management

Managing an investment portfolio is a dynamic process that becomes particularly critical as one approaches retirement. Retirement planners may look to balance growth and security through intelligent asset allocation and diversification. They work to ensure that investments are spread across a variety of asset classes, reducing the potential impact of market volatility and safeguarding the retiree’s nest egg.

Social Security Planning

Social Security benefits represent a significant source of income for many retirees, yet the system’s complexities often lead to suboptimal claiming strategies. Misconceptions abound, including the mistaken belief that benefits should be claimed as early as possible. However, this can result in reduced lifetime benefits. Retirement planners can help clients determine when they should claim their benefits, and then integrate those payments into a comprehensive income plan.

Estate Planning

Estate planning is another area where retirement planners can provide indispensable advice. They assist clients in articulating their legacy intentions through tools such as wills, which specify the distribution of assets posthumously; and trusts, which offer control over asset distribution, potential tax benefits and protection from creditors.

Long-Term Care Planning

Long-term care is an often-overlooked component of retirement planning. It encompasses a range of services, from assistance with daily activities to medical care, required by individuals with chronic illnesses or disabilities. Since Medicare and health insurance typically do not cover long-term care, it’s on the individual to include it in their retirement plan. That’s where a financial advisor can help, whether it’s helping you purchase a long-term insurance policy or saving for the care that you may need down the road.

How Much Do Retirement Planners Cost?

A financial advisor goes over his services and fees with a pair of prospective clients in need of retirement planning.

Retirement planners, like other financial advisors, may charge a range of fees for their services. Depending on the advisor, you may pay a flat or hourly rate, or perhaps an asset-based fee if you receive ongoing portfolio management. Understanding these different fee structures is an important part of the process of hiring a retirement planner.

Assets Under Management (AUM) Fees

Asset-based fees or AUM fees, are recurring charges calculated as a percentage of the client’s total assets under management. This fee model creates a shared interest in the client’s financial success, as the advisor’s compensation is directly linked to the growth of the portfolio. According to a 2023 analysis from AdvisoryHQ, average AUM fees range from 1.18% to 0.59%. Some advisors will offer financial planning services, including retirement planning, as part of this AUM fee. Others may charge an additional fee for services outside of investment management.

Hourly Rates

Hourly rates are another common pricing structure. According to a 2023 report from, the median hourly fee for financial planning is $250. This approach can be particularly economical for clients seeking advice on specific issues or those just beginning their retirement planning journey. It allows clients to pay solely for the time they need, helping to control costs when comprehensive planning services are not required.

Flat Fees

Flat fees offer a straightforward and transparent pricing option, with charges ranging from several hundred to a few thousand dollars for a predetermined scope of services. These services might include the creation of a detailed retirement plan or a financial review. Knowing the exact cost from the beginning can provide clients with a sense of financial security, eliminating the uncertainty associated with variable AUM or hourly rates. This fee structure is ideal for clients who prioritize a clear and upfront understanding of their financial obligations.


Retainers involve a set billing cycle for ongoing advice, which is ideal for individuals looking for consistent engagement with a retirement planner. This arrangement can include regular portfolio reviews, check-ins, and updates on financial developments. The median retainer fee for financial planners is $3,000, the same Kitces survey found.

Assess Your Retirement Goals and Needs

Before seeking professional advice, take the time to assess your financial situation, retirement timeline, desired lifestyle and risk tolerance. Understanding your goals provides a solid foundation for productive discussions with potential advisors, enabling them to tailor strategies that align with your objectives.

As you ponder your own retirement, what lifestyle do you envision? What might your health needs look like? You may want to reflect on the various financial necessities you’ll encounter during this life stage. These will vary based on your individual lifestyle, health and the quality of life you wish to maintain.

Finding an Advisor Who Meets Your Needs

A financial advisor shakes hands with two new clients at the end of their first meeting.

Financial advisors can be broadly classified into two principal types: investment advisors and financial planners.

Investment advisors, or asset managers as they are sometimes known, concentrate primarily on the stewardship of clients’ investment portfolios, with a focus on aligning financial returns with the clients’ appetite for risk.

Conversely, financial planners adopt a holistic approach that includes retirement planning, estate planning, tax strategy formulation and insurance assessments. This comprehensive perspective ensures that all facets of a client’s financial life are integrated into a cohesive plan that is designed to achieve long-term financial security and peace of mind.

When looking for a financial planner who offers retirement planning services, consider the various professional credentials that an advisor may have. Be on the lookout for advisors who hold the certified financial planner (CFP), chartered financial consultant (ChFC) or certified retirement planning counselor (CRPC) designations. These credentials can indicate specialized knowledge in areas essential to effective retirement planning, as well as adherence to ethical standards.

Remember, the key to a successful advisory relationship lies in matching an advisor’s expertise with your unique needs. If you’re in need of a comprehensive and holistic plan for retirement, chances are good that you’ll want to work with a financial planner. If you have a good handle on your finances and only need some investment advice, financial an advisor who offers comprehensive planning services won’t be as much of a priority.

Pros and Cons of Hiring a Retirement Planner

Like any big decision, it can be helpful to weigh the pros and cons of hiring a retirement planning advisor. The advantages of working with a retirement planner can include:

  • Expertise and knowledge: These professionals may possess a deep understanding of complex financial instruments and can help individuals navigate the intricacies of retirement planning.
  • Customized financial planning: A retirement planner works closely with clients to develop personalized financial plans tailored to their unique goals, risk tolerance and financial situation. By conducting thorough assessments and analyses, they can recommend strategies that align with an individual’s specific needs and aspirations, ensuring a more effective and targeted approach to retirement planning.
  • Risk management: Retirement planners also work to mitigate risk and safeguard investments against market volatility. These professionals employ diversification strategies, asset allocation techniques and risk management tools to help clients preserve and grow their wealth over time.
  • Holistic approach: Beyond investment management, retirement planners offer a holistic approach to financial planning that encompasses various aspects of retirement preparation, including income planning, tax planning, estate planning and planning for healthcare costs.

However, the drawbacks of hiring a retirement advisor can include:

  • Cost: These professionals typically charge a premium for their services. While the value they provide may justify these expenses for some individuals, others could find it challenging to justify the cost, especially for those with limited assets or resources.
  • Conflict of interest: In some cases, retirement planners may face conflicts of interest, particularly if they receive commissions or incentives for recommending certain financial products or services. This potential bias could compromise the objectivity of their advice and lead to recommendations that prioritize their interests over those of their clients.
  • Lack of control: Entrusting retirement planning to a professional means relinquishing a degree of control over one’s financial decisions. While this can be advantageous for individuals who prefer to delegate responsibility and expertise, others may feel uncomfortable ceding control and prefer to manage their retirement portfolios independently.
  • Mismatched expectations: Despite their expertise, retirement planners may not always meet clients’ expectations or accurately predict market outcomes. Economic uncertainties, unexpected life events and changes in personal circumstances can all impact the effectiveness of a financial plan, leading to potential dissatisfaction or disappointment.

Bottom Line

Financial advisors can offer more than just investment advice. They can help you build a personalized and comprehensive financial plan for retirement that accounts for your assets, budget and other financial needs. While it’s important to find a planner whose philosophy aligns with your personal goals and values, the benefits of tailored financial strategies and the peace of mind that comes with professional guidance can be invaluable.

Retirement Planning Tips

  • Social Security plays a pivotal role in the retirement plans of most Americans and choosing when to claim your benefits is an important decisions. Luckily, SmartAsset’s Social Security calculator can help you estimate how much your benefits will be at different claiming ages.
  • 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.

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