A financial planner is a professional who can help create a plan to achieve your financial goals. Some examples of financial planners include investment advisors, accountants or insurance agents, according to the Financial Industry Regulatory Authority.
Financial planners have various specialties and backgrounds. Ultimately, they can help you analyze your finances and help you make a plan to reach your financial goals.
“Financial advisor” is a more broad, general term than “financial planner,” according to Investopedia. Financial planners create plans to help you meet your long-term goals, and financial advisors help manage your finances, investments and/or accounts. You can consider a financial planner as a type of financial advisor.
Ultimately, you should hire a financial planner who has the expertise, experience and credentials to help you navigate your finances. You should also make sure you trust your financial planner and can afford their fees.
When in doubt, reach out to financial planners near you. Ask about their services and prices to determine if hiring one is the right move for you.
In addition, a retirement planner must have a clear understanding that the financial assets you are accumulating, as well as other resources you have such as pensions, Social Security, part-time work, home equity, etc., are all pieces of a puzzle that must be put together in a way that will result in reliable monthly paychecks once you are retired. This regular income planning requires an in-depth knowledge of taxes, Social Security, and retirement plan rules. Such knowledge often requires years of experience and training to accumulate.
The first thing you should expect when you sit down with a retirement advisor is a detailed look at your complete financial picture. What are your assets? Do you have investments, real estate, pending inheritances or other resources of value? What are your debts? Do you have a mortgage, car payments, credit cards, student loans, small business liabilities or other loans? How do you service your debt while still saving for retirement?
Once all of the details are in hand, they can put together a plan and offer you advice on investments, retirement planning, estate planning, tax liability, and your kids’ college education. The breadth of the advisor’s knowledge can make a lot of your difficult decisions easier.