When it comes to saving for retirement, most of us trust our employer's retirement plan administrator to help steer us toward the specific funds we need. While this is better than no plan at all, it's not the most ideal setup. We are taking retirement advice from the institution that is selecting the funds we are buying. Here is who you can turn to for retirement savings advice that is truly independent.
Ask yourself if you are ready for professional help. The first thing you want to do is make sure you are in a position to make paying for professional advice worth it for you. If you are still struggling with excessive credit card debt or you don't have any emergency savings built up, then you should probably spend your energy and money trying to fix that situation first. Once you are out of the personal finance 101 phase, then it makes more sense to turn to a professional for retirement investing advice. Keep in mind that a financial adviser will not be able to provide an investment miracle. View them as the icing on your retirement planning cake.
Find a true professional. If you are ready to pay for professional help, your first order of business should be to locate a financial adviser who is certified. In the financial planning world, the key designation is being a certified financial planner (CFP). Having this designation means that the adviser has a college degree, has passed an exam, meets annual education requirements, and would face disciplinary action if they violate board regulations and ethics standards. To find certified advisers, visit cfp.net, and do a search for someone in your area. Since retirement planning also involves tax implications, it may be in your best interest to involve a certified public accountant (CPA). Find a CPA by visiting aicpa.org. Having both a CFP and a CPA will provide the best of both worlds to your retirement planning efforts.
Work with a fee-only planner. Even better than a CFP is a CFP who is fee-only. This means that they do not receive a commission for selling certain investment funds. You pay them what basically amounts to an hourly fee and they give you retirement investing advice. This process should not take more than 2 or 3 hours if you have a basic retirement planning situation. To find a fee-only CFP, visit he National Association of Personal Financial Advisors at napfa.org and perform a search for a local adviser.
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Balance professional help with your own knowledge. Ultimately, it's up to you to make sure your retirement is taken care of. You should be heavily involved with the process. I'll use education as an example. Our taxes or tuition pay for the teachers who provide our kids' education. Does this mean we should turn a blind eye to helping our kids learn? No. We should be helping them with homework, reinforcing what the teachers teach, and looking for learning opportunities throughout their childhood. Likewise with your retirement investing assets, you should be participating in the process. Educate yourself on the basics of retirement investing and make sure you have a CFP thoroughly explain the money moves you'll be making.
Phil Taylor is the author of the popular 52 Ways to Make Extra Money. Find out how to save more money and get the latest news on the best online savings accounts and the best online stock brokers at his blog, PT Money: Personal Finance.