4 Ways an Advisor Can Help Optimize Your Retirement Planning

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According to a recent Vanguard study, individuals who work with a financial advisor achieve a 3% greater return on their investments versus individuals who do not work with a financial advisor.[1] Yet 37% of workers and 19% of retirees do not know whom to go to for financial and retirement planning advice, and only one in three individuals currently works with a financial advisor.[2]

How, exactly, do financial advisors add value to your retirement savings? There are several ways an advisor can help improve your retirement outcomes.

#1 – Establish an investment portfolio to withstand market volatility.

An experienced financial advisor understands the importance of developing a long-term investment allocation that is in line with your current financial situation, goals for the future, investment timeline, risk tolerance and more. An advisor can help you establish a diversified portfolio that is well positioned to withstand market fluctuations, allowing volatility to work in your favor.

One of the main benefits of working with an advisor is that he or she can help you resist the urge to make emotionally driven investment decisions, such as panic selling when the market is down. By remaining level-headed in your investment approach, you can be in a better position to take advantage of opportunities during periods of market volatility.

#2 – Access tax efficiencies.

A qualified financial advisor can help maximize your retirement income by optimizing your tax efficiencies through use of the following:

  • Roth conversion –If it makes sense for your particular situation, an advisor may recommend you convert a traditional IRA to a Roth IRA. To do this, you will need to pay taxes during the year in which the conversion takes place; however, the upside is that withdrawals in retirement are tax-exempt.
  • Tax-loss harvesting –A financial advisor will look for opportunities to harvest investment losses in order to offset gains and lower your taxable investment income.
  • Tax-advantaged accounts – An advisor can help ensure you are saving in tax-efficient accounts. For example, your advisor may recommend you invest in a health savings account, which allows you to contribute money on a pre-tax basis, grow your earnings tax-free and take tax-free withdrawals to cover medical expenses.
  • Tax deductions –An advisor will look for opportunities to maximize your tax deductions and credits to lower your taxable income and maximize your retirement savings
  • Tax planning – A financial advisor should view all potential financial decisions through a tax-efficient lens. Tax planning incorporates a wide range of strategies all designed to lower your tax liabilities across all aspects of your financial life.

#3 – Establish a retirement income strategy.

Saving for retirement is just the beginning. Once you have retired, how will you turn your savings into a monthly income to cover your living expenses and fund your desired retirement lifestyle? A qualified financial advisor can establish a retirement income strategy to meet your needs with a focus on ensuring you do not outlive your assets.

Your retirement income strategy should take into account all potential sources of income, such as retirement accounts, taxable savings, Social Security benefits, pensions, rental income, etc.

#4 – Implement a strategic withdrawal strategy.

As you near retirement, you may begin to wonder, “what is the best way to withdraw from my various sources of retirement savings?” A financial advisor can help implement a withdrawal strategy that makes sense for your personal situation, with a focus on maximizing your monthly income and minimizing your tax exposure.

Your advisor can help you find a balance between satisfying your required minimum distribution (RMD) requirements while also maintaining an adequate level of retirement savings to last your lifetime.

It is also important to consider what sources to draw from for your various needs, as well as the timing of your withdrawals. For example, if the markets are down, it may not be a great time to sell stocks to fund your lifestyle. On the flip side, when markets are up, you may want to sell some stocks and shift those assets to more conservative investments.

If you are looking for an advisor to guide your retirement planning strategy, we would love to have a conversation. To learn more about how United Capital Financial Advisors can help you plan for retirement, please contact us.


[1] https://advisors.vanguard.com/content/dam/fas/pdfs/IARCQAA.pdf

[2] https://www.ebri.org/docs/default-source/rcs/2022-rcs/2022-rcs-summary-report.pdf

This commentary contained herein is intended for informational purposes only and should not be construed as tax, legal or investment advice. Past performance is not indicative of future results. Clients should obtain their own tax, legal or investment advice based on their circumstances. The material is based on sources deemed reliable but is not guaranteed.

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