What Will a Good Retirement Planner Do for Me?

Retirement planners offer specialized advice on the distribution of funds

Retirement planner going over financial goals with an older couple
••• Martin Barraud / Getty Images

A good retirement planner should have a skill set that goes beyond basic financial planning or providing investment advice. This income planning requires an in-depth knowledge of taxes, Social Security, and retirement plan rules. It often requires years of experience and training.

A retirement planner must understand your financial goals. They need to know when you'll need your savings. On what will you be spending? Your planner should have a clear picture of the assets you're accumulating, as well as other resources you can count on. These might include pensions, Social Security, part-time work, or home equity.

They're all pieces of a puzzle that must be put together in a way that will result in reliable monthly paychecks once you retire.

Key Takeaways

  • Retirement planners are a subset of financial planners with expertise in retirement issues like account withdrawals and Social Security benefits.
  • These planners can differ in fee structure. Some may charge an hourly rate, while others charge flat fees. Still, others charge commissions or a combination of fees and commissions.
  • There may be some overlap between retirement planning and other forms of financial planning or advice. But it can depend on the planner you work with.

What Advice Can a Planner Give Me?

A retirement planner should be able to offer advice on when you should take Social Security benefits in a way that's best for you. They can tell you what pension distribution choices are right for you. They can advise as to whether an annuity is a suitable investment. A planner should know which accounts you should take withdrawals from each year and in what amounts. That can reduce the taxes you'll pay.

A planner can tell you how much retirement income you can reasonably expect to have. They'll know what withdrawal rate is right for you when you're taking money from a traditional portfolio. How much of your money should be in guaranteed investments?

What types of taxable income will your investments produce? A planner can guide you as to how you can arrange them to reduce taxable income. They can tell you whether you should leave your money in your company plan or roll it over into an IRA.

Other issues should also factor in: A good planner can tell you whether you should pay off your mortgage before or during retirement. They can advise you on whether a reverse mortgage might be a good option for you. They'll let you know whether they think you need long-term care insurance and whether you should keep your life insurance policies.

Good retirement planners will not make recommendations until they know your expected time horizon, your level of experience with investments, your goals, and your tolerance for risk. They'll also want to know your need for guaranteed income. They'll want a thorough picture of all of your current resources, such as assets, liabilities, and current and future sources of income.

Good retirement planners will want to know where all your investments are so that your portfolio will make sense as a whole. That can help them adjust to produce the best stream of retirement income.

How Much Do Retirement Planners Charge?

Retirement planners may charge in any of a few ways. They may charge an hourly rate or a flat fee to run an income plan or a cash flow projection. Some planners charge quarterly or annual retainer fees. Or they may charge a percentage of assets that they manage on your behalf. They might ask that commissions be paid to them from the financial or insurance products you buy through them. Or they might have a structure that includes a combination of fees and commissions.

Always ask for a clear explanation of how the planner you're thinking of hiring will be compensated.

What About Traditional Planning or Advice?

Retirement planning falls under the broader definition of financial planning as an area of expertise. But it requires greater knowledge.

Investment advice is related to how your money is invested. Those who offer this type of advice might not offer much in the way of planning. Many retirement planners will offer this type of advice as well as a broader range of financial planning services. But it doesn't always work the other way around.

How Do I Find a Good Retirement Planner?

Seek someone who has expertise in tax planning, Social Security, and retirement withdrawals. They need to be able to devise a timeline and a plan that tells you how to take money out in a tax-efficient way. A good planner should be able to advise you on the use of guaranteed income products that can create security.

One option is to check out the Investments & Wealth Institute. It offers a designation called the RMA, or Retirement Management Advisor. You can try looking for someone with an RMA designation if you want someone who specializes in retirement planning. They are scattered throughout the country.

Article Sources

  1. Investments & Wealth Institute. "RMA Certification Curriculum Overview."

  2. National Association of Personal Financial Advisors. "What Is Fee-Only Financial Planning?"

  3. Investments & Wealth Institute. "RMA Certification."