(Image credit: Getty Images)If you’re approaching retirement or have already stopped working, it may have occurred to you that saving for retirement was the easy part.Most likely, you had contributions to a 401(k) or other employer-provided retirement savings account automatically deducted from your paycheck. Target-date funds, which automatically adjust your investments as you approach retirement, have taken the guesswork (and hopefully the stress) out of investing those contributions. For investments outside of your workplace plan, many brokerage firms have harnessed digital tools to provide low-cost investment advice. (We’ve evaluated the online services that many major brokers provide.)But once you retire and need to start withdrawing from your nest egg, the task of managing your money becomes more difficult. Fewer than half of retirees say they’ve estimated how much they’ll need to withdraw from their savings and investments to cover their expenses, according to the Employee Benefit Research Institute’s 2024 Retirement Confidence Survey.Subscribe to Kiplinger’s Personal FinanceBe a smarter, better informed investor.
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Sign up for Kiplinger’s Free E-NewslettersProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.Profit and prosper with the best of expert advice – straight to your e-mail.Even if you’ve nailed down the amount of income you’ll need each month to retire comfortably, you’ll have to wrestle with a host of decisions that can’t be put on autopilot, such as which accounts you should tap first, how to lower taxes on your withdrawals and when you should sign up for Social Security. Add to the mix concerns about long-term care, estate planning and charitable giving, and you may start to feel as though managing your savings is a full-time job.With the stakes so high, you’re probably going to want some advice. For many retirees, that means hiring a financial planner. A qualified certified financial planner can manage your portfolio and provide advice on a range of other subjects, from withdrawal rates to legacy planning.To earn the CFP designation, an individual must complete a course of study, pass a rigorous exam, have 6,000 hours of experience related to financial planning and commit to continuing education. In addition, CFPs are required to act as fiduciaries, which means they must put their clients’ interests above their own.Many CFPs provide excellent advice, but their guidance doesn’t come cheap. Compensation structures vary, but a common one is an assets under management (AUM) model, in which the planner bases his or her fees on a percentage of your portfolio. For example, if you have a $1 million portfolio and your planner charges a 1% fee, you would pay the planner $10,000 a year.The percentage typically decreases as your portfolio grows. On average, advisers charge 1.12% per year for a portfolio of $100,000, 1
Dom. Dic 29th, 2024
