5 Retirement Plan Questions to Ask a Financial Advisor

There’s never a wrong time to consider your retirement plan. Nonetheless, the sooner you start, the better. You may have heard about the power of compound interest. We all want to get some for ourselves. 

No matter where you are at your stage of retirement plan, you can always use the help of a trained professional. If you’re unsure where to start, setting up a free consultation with a financial advisor is a great first step. 

Stumped about what to ask? No worries. We’re going over the top five questions to ask your financial advisor. 

1. How Much Would I Need to Save to Reach Financial Independence By Retirement Age?

When most mention retirement, what they’re referring to is financial freedom. Financial freedom is different for everyone. That’s why it’s an important question to ask first. 

Financial freedom means having enough money to pay bills and expenses without working. Another way it’s often referred to as “a paycheck for life.” Reaching financial freedom isn’t as complicated as many people think it is to achieve. 

The right retirement plan can help you get there faster. A financial advisor can discuss options to help you plan for retirement.

2. Are You a Fiduciary? 

When choosing a financial advisor, make sure it’s someone who has your best interests at heart. A code of law and ethics binds a fiduciary to work in a client’s best interest. 

A fiduciary doesn’t sell financial products. In that way, they aren’t acting like salespeople pairing people with products. Instead, they choose investments to reach your retirement planning goals.

3. What Is Your Investment Philosophy? 

All financial advisors have an investment philosophy. It may cater to your goals, but they should be able to explain it.

It should be straightforward and easy to follow. They should provide information on how their philosophies align with your retirement goals. 

They should have strategies to help you navigate changing tax laws. They should also help you manage the emotions of investing in the market.  

4. How Will I Compensate You? 

Fees are an important aspect of investing that many people forget. Having a financial advisor is an essential step in your retirement planning. You should understand how they get compensated for their service. 

Ask them questions like: 

  • Do you receive transaction fees? 
  • Are you paid by the hour, year, or transaction? 
  • Do you receive commissions based on the products you provide? 

Knowing about compensation can help you factor fees into your overarching retirement plan. 

5. What Happens to My Investement if You Leave the Firm? 

While this may seem like a strange or morbid question, it’s not. You’re trying to figure out what happens to your investments if they are no longer with the firm. You’re looking for guidance on who to contact if your financial advisor moves to another firm.

Taxes Are a Major Part of Your Retirement Plan

Believe it or not, taxes are a significant part of your retirement plan. Having reliable tax specialists to help you navigate your retirement plan is essential. 

Looking for financial guidance for your retirement plan? Call on the tax professionals at Pacific Tax Financial Group