Expert Insights for Smart Financial Planning

Have You Outgrown Your Financial Professional?

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Your needs change the closer you get to retirement, so even if you have a great financial adviser, the relationship may no longer be a good fit. How to tell when it's time to move on.


I meet a lot of people who say they really value the advice they’ve gotten over the years from their financial professional.

SEE ALSO: Pay for Only as Much Retirement Advice as You Need

They appreciate the help they received while saving for a house, trying to stay out of debt, getting their kids through college and accumulating their nest egg.

And yet, sometimes the same folks who say they “love” their advisers start to notice that they don’t necessarily have all the answers when it comes to retirement.

That doesn’t mean their advisers aren’t good at what they do. It just means what they do is no longer a fit for their clients’ evolving needs.

In the second half of your financial life — when your focus flips from growing your money to preserving it and using it as income when you no longer have a paycheck — things can get pretty complicated. And retirement planning is growing ever more complex for a number of reasons, including:

  • We’re living longer. According to the Social Security Administration, a man who reaches age 65 today can expect to live, on average, to 84. A woman turning age 65 today can expect to live, on average, to 86. And fewer and fewer retirees have pensions they can rely on for guaranteed income. It’s no wonder so many retirees say their No. 1 fear is that they’ll run out of money.
  • The market is volatile, and mistakes can be costly at this stage of your life. If, like most people, the bulk of your savings is in a 401(k) or IRA and you suffer a loss, you won’t necessarily have the time or ability to recover your money. And that can have a serious effect on your lifestyle.
  • Interest rates are unpredictable. Today’s retirees are caught between a rock and a hard place. Because interest rates have been so low, the “safe” products we used to count on in retirement, such as certificates of deposit, don’t pay enough to keep up with inflation. And in today’s rising interest rate environment, bonds aren’t as reliable as they used to be, either.
  • Health care and long-term care costs are soaring. According to the latest estimate from Fidelity Benefits Consulting, a 65-year-old couple who retired in 2017 will need an average of $275,000 to cover medical expenses for the rest of their lives, up from $260,000 in 2016. Long-term care costs also continue to rise: The Genworth 2017 Cost of Care Survey found the annual median cost of long-term care services rose an average of 4.5% from 2016 to 2017. That’s nearly three times the 1.7% U.S. rate of inflation.

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If your adviser isn’t educated, experienced and focused on getting you successfully to and through retirement, it may be time to make a change.

Here are four things your adviser should be making a priority:

  • Making an income plan. In retirement, you have to create your own paycheck. You’ll get a boost from Social Security and your pension (if you have one), so your adviser should be up to date on the claiming strategies that benefit both you and your spouse. But you’ll also be depending on your own investments, and you’ll need a plan that keeps your money safe and in your pocket. That includes spending down your retirement accounts in the most tax-efficient manner.
  • Protecting your nest egg. As we’ve seen from recent hiccups and corrections, the market can rise and fall without warning. To have a successful second half, you have to be prepared ‐ and that means adjusting your risk tolerance to suit your income needs in retirement. You also may want to look at alternative investments that offer additional diversification and can decrease your dependency on the stock market.
  • Factoring in longevity. The goal in retirement is to set yourself up with dependable lifetime income — even if you live past 100. A retirement specialist can help you decide if purchasing an annuity makes sense in your overall plan and, if it does, can assist you in reading through the fine print and understanding the advantages and disadvantages of the various types of annuities available.
  • Managing health care and long-term care costs. Many soon-to-be retirees think Medicare will cover all their medical costs once they turn 65. They’re in for a big surprise. Even if you’re in a Medicare health plan that covers a certain service or item, you generally have to pay a deductible and copayments. And there are limits to what you’ll get for long-term care. Your adviser should be able to discuss your best options when it comes to Medicare plans and what insurance products are available to cover costs if you or your spouse should need extra assistance.

If you’re getting close to retirement — or if you’re already there — the question isn’t so much whether you like, or even love, your current financial professional. It’s whether he or she is the best person to get you into and through retirement — which should be the best time of your life.

Is the advice you’re getting right now going to give you the future you’ve worked so hard for?

See Also: 4 Must-Dos Before Retirement

Kim Franke-Folstad contributed to this article.

The article and opinions in this publication are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you consult your accountant, tax, or legal adviser with regard to your individual situation.

Securities offered through Kalos Capital Inc. and Investment Advisory Services offered through Kalos Management Inc., both at 11525 Park Woods Circle, Alpharetta, GA 30005, (678) 356-1100. Retirement Income Strategies is not an affiliate or subsidiary of Kalos Capita, Inc. or Kalos Management Inc.

Kristian L. Finfrock is the founder of and a financial adviser at Retirement Income Strategies. He is an Investment Adviser Representative of Kalos Capital and a licensed insurance professional. He resides in Evansville, Wisconsin, with his two daughters.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.