I will be 65 years old this December, but I will not retire from work until age 66. I have invested in my employer 401(k) plan for retirement. What area of specialty should I be looking for in a financial planner?
Choosing a financial planner is as important as choosing a doctor or lawyer. Working with a financial planner is a very personal relationship. For starters, in addition to competency, a financial planner should have integrity, trust and a commitment to ethical behavior and high professional standards. They should also serve in a fiduciary role, which means that your best interests will come first.
Many planners specialize in working with certain types of clients, such as small-business owners, exectives or retirees. In addition, some planners specialize in certain areas of planning such as retirement, divorce or asset management. As such, the Financial Planning Association® recommends that you interview at least three planners in person to find the right one to serve your needs. By interviewing several planners, you'll get a better understanding of each planner's process and you will be in a better position to choose the process that works best for you.
"In the first meeting you should be getting ideas on distribution strategies, pension plan benefits, including Social Security or other government pension benefits for which you might qualify, as well as investment risk and retirement tax strategies," said FPA member Nancy Sue Buerger, CFP®, of Ameriprise Financial. "But, more importantly, look for someone who can spend time helping you understand this next period of your life and what you would like to accomplish. What goals do you have that you would like to see happen? Where would you like to travel to that you have not been? What goals do you have for your family? All of this is a part of your overall plan."
When interviewing prospective planners, be sure to determine whether they have had a great deal of experience dealing with clients with similar or near situations.
And lastly, Buerger suggests that you work with someone that makes you feel comfortable when asking questions. "Some of your concerns will involve subjects that are new to you," she said. "Questions should be expected, and your financial planner should expect you to ask questions and be willing to help you understand the options and strategies."
The Financial Planning Associatioon has a variety of resources you should review before meeting with a planner, including one that provides a list of questions to ask a prospective planner.