How Financial Advisors Can Help You Achieve Your Retirement Goals

Between 2017 and 2021, my two brothers and I successfully summited the tallest peaks in Wyoming, Montana, and Utah. Next to Mt. Rainier, Montana and Wyoming hold the unofficial titles of the second and third-hardest state high points to bag in the lower 48. 

While we could certainly look back with 20/20 vision and find areas of our trips that we could’ve done better on, there was one thing that we intentionally prioritized over anything else: Preparation. Each mountain required its own unique aspects of preparation and expertise that we couldn’t get by just “winging it”. If we failed to prepare, we risked not reaching our destination or endangering ourselves. 

Just like mountaineering requires an enormous amount of intentionality and forethought, so does the realm of retirement planning. To make it successfully up the mountain(and down again) demands a well-thought-out route and a plan for the inevitable unexpected. A well-experienced guide can help to make this experience even better.

In this post, let’s adventure into how a good financial advisor can be your guide up to, and after, the climb up the mountain of retirement.  

What are Financial Advisors and How Can They Help?

While the word “retirement” can take on many forms for different people, there is one aspect that it conveys across all its uses: financial independence. Independence can be a rewarding and freeing state to achieve if prepared properly. However, it can also lead to unintended consequences if not handled with expertise and care. 

A good financial advisor will prepare an aspiring retiree to consider multiple different aspects of their retirement including but definitely not limited to finances. Here are the different aspects they’ll handle: 

1. Goal Planning: As we discussed in our last blog post, goal planning is the most important part of the process of achieving your goals. A financial advisor will help you to identify, set, and prioritize your financial goals. Not only that, but they will also help to hold you accountable along the path to achieving them. 

2. Asset Accumulation: Most people think of investments when this word comes up, however, asset accumulation is much more than just asset growth. Accumulation involves minimizing expenses, costs, and taxes. This can involve investments that carry low internal expenses, typically referred to as the expense ratio. Other costs that can be avoided or minimized are typically upfront sales charges, commissions, or 12 b-1 fees. Taxes are a third aspect of minimizing cash outflows. Many people think that paying no taxes is the ultimate savings. However, tax management is an ongoing process of ensuring taxes are paid at the lowest possible rate. This can involve purposefully paying taxes at a low rate at the present time vs. paying them at a much higher rate in the future. An example of this might be to voluntarily make a Roth IRA conversion at a 12% tax rate now vs. potentially having to pay 24% or 32% down the road when your income is higher. 

3. Risk Management: In the accumulation phase of our life, we tend to be much more focused on increase than on the risk of decrease. Many young people might forego health insurance or full coverage auto insurance to save money on the cost of premiums. However, as we age, the importance of protecting what we’ve accumulated becomes vital. Proper insurance coverage and hedging investment risk are much more important as retirement nears. This can involve getting health insurance with a higher premium and lower out-of-pocket max or scaling back on portfolio risk with more conservative, less volatile investments. 

4. Personal Preparation: When someone nears retirement, it can be tempting to “coast” to retirement financially and emotionally. However, this is the time when it becomes most important to have a well-defined picture of what you want your retirement to actually look like. This could look something like asking yourself “What does a day in the life of my retirement look like”, or “How will I replace the social connections when I’m not going to work anymore”. This may sound like a non-issue on paper, but without a sense of how to prepare for these personal changes, many retirees face issues of loneliness and lack of purpose. 

Beneficial Post-Retirement Steps to Take

Once you’ve successfully reached the pinnacle of Mt. Retirement and have officially clocked out for the last time, all of your worries are over, right? There is an old saying in mountaineering: “Reaching the top is a 51% summit. Now you have to get back down.” The fact of the matter is that the majority of accidents in mountaineering actually happen on the way down, not the way up. A financial advisor is key to guiding you to safety. 

In retirement, continued preparation is just as vital as it was before retirement. Here are some areas you can focus on for continued preparation: 

• Social Security: Social Security makes up a significant portion of the retirement plan for the vast majority of retirees. There is no one-size-fits-all strategy for when to take Social Security. Age, marital status, longevity, and other income sources all contribute to the decision. A financial advisor will help you to weigh all of your choices, potential outcomes, and risks in each scenario. 
• Distribution Planning: For most retirees, taking money out of their retirement accounts is more difficult than putting money in. For many, it is difficult to gauge the amount, frequency, and type of account to withdraw from. This is where a trustworthy financial advisor will help you to set up a plan that is centered around your retirement income needs. In addition to providing you with the income you need, a good distribution plan will also be sustainable throughout various market conditions and could last for a decades-long retirement. 
• Healthcare Planning: For the majority of Americans, Medicare is a very cost-effective solution for most healthcare needs. However, there are many costs that Medicare doesn’t cover, including long-term care. Without the proper long-term care plan in place, there can be significant costs that a family might be left paying out of pocket. Another risk in healthcare planning is finding good health insurance prior to qualification for Medicare. Many Americans are retiring before 65, which leaves a need for health insurance for up to 5-10 years before being eligible for Medicare. 
• Taxes: It is a common misconception that taxes always go down in retirement. While this can be the case for some, it is actually more common for taxes to go up for many retirees. Reasons for this vary but can include growth of pre-tax retirement assets, income from part-time work, or sales of other assets. Even though a retiree may not be actively working full-time, taxes can still arise from other areas. Careful tax planning with a good financial advisor should be done as a year-round activity, with an ongoing strategy to monitor opportunities as they come up. My favorite part of tax planning is when someone is interested in charitable giving. There are so many ways to give to your church or charities and receive tax benefits in the process. If you want to learn more, check out our post on 3 Tax-Efficient Tithing Strategies for Charitable Giving. 

Looking to Reach Mt. Retirement? Let Evergreen Financial Advisors Guide You

At Evergreen Financial Group, we take pleasure in guiding our clients through the adventure of retirement. If you don’t currently have a guide to help in your journey, you can take the first step by scheduling a complimentary Discovery Meeting. We will discuss our simplified process of how we help you to prepare for the biggest adventure of your life. 

We look forward to meeting you!

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This content is developed from sources believed to be providing accurate information. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Evergreen Financial Group, LLC is a registered investment advisor offering advisory services in Montana and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. This communication is for informational purposes only and is not intended as tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This communication should not be relied upon as the sole factor in an investment making decision. All opinions and estimates constitute Evergreen Financial Group’s judgement as of the date of this communication and are subject to change without notice. Evergreen Financial Group does not warrant that the information will be free from error. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk.