It’s easy to see that one of the worst mistakes you can make with retirement planning is putting off the investing process. Yet, another big mistake is simply not turning to a professional to create a solid retirement plan.
The Federal Reserve reports that, in 2022, just 31% of people saving toward retirement felt confident in their progress. While having some type of retirement strategy is important, having a well-defined plan may help you put away more money, retire sooner, or gain peace of mind. To do that, consider hiring a professional to guide you.
There are some situations where you should never try to piece together your own retirement plan and instead should seek out guidance.
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People with little interest in investing
For some people, investing is a chore and a source of frustration. There’s a lot on the line to make the right decisions, but not everyone likes putting the time and effort into managing investments on their own.
If you don’t have any interest in investing or preparing yourself financially, financial advisors can offer the framework for you and, depending on who you hire, do the investing work for you. Hands-off retirement planning is possible.
People who hate thinking about the future
Not everyone wants to think about all the “what if” situations that could occur in the future. You may be the type of person who likes to live in the here and now.
That’s great, as long as you have a professional on hand who can help you behind the scenes to put a plan in place. Even if you don’t want to think about the future, let them do it for you so when that time comes, you have the support you need.
People who don’t stay up-to-date on retirement and tax laws
Laws change often, and those impacting your taxes and retirement are included in that. From navigating legalese to trying to determine how various changes to laws impact you, it can be a challenge for many people.
Tax laws at the federal and state levels change often. Social Security income changes yearly as well. Factors like minimum required distributions and investment limitations can also change. Unless you plan to stay on top of this throughout the year, you may not want to do your own retirement planning.
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People who procrastinate
You have good intentions and know the value of retirement planning, but you just don’t do it. You could be one of the people who constantly procrastinate about it because you think you have plenty of time or you don’t have enough income to invest now.
If you know you’re likely to procrastinate, it’s helpful to turn to a financial professional who can guide you and put a plan into action.
People who hate math
Let’s face it, investing seems to rely heavily on math and balancing your budget. That’s true, but today’s tools make it easy to do this.
Let’s say you don’t want to calculate your annual expenses in retirement or try to estimate the rate of return on one investment strategy or the next. You could use one of the apps or tools available to handle this aspect for you.
People who value a professional’s opinion before decision-making
Having the confidence to make the right decisions for such a valuable (and even life-changing) type of investment plan is not always easy. It may be valuable to you to have a professional who can ensure you’re on track.
Many people see the value of hiring a financial guide, whether it’s a person at their bank or credit union or a specialized retirement advisor. Their experience could be worth any cost to you.
People who are getting older and haven’t started planning yet
The older you get, the harder it may become to plan for retirement. You’ve heard that before, but the reality is that you can start at any time. If you’re older, it’s not too late to create a plan, but it may be more complex.
You may want to speak to a professional about the planning strategies available to late starters, including access to catch-up tactics that could help you boost your savings faster.
People who want to retire early
It’s not a pipe dream to want to retire early, and if you have the right strategies in place, it may be more possible than you realize.
There’s a lot of work that goes into this, including creating a mock retirement budget, choosing the right types of investment strategies, ensuring you plan for lifestyle changes, and evaluating your future financial risk. If you’re serious about retiring early, you may want to lean on a pro for guidance on how to make it happen.
People with multiple investment goals
You have numerous goals, perhaps to buy a home, retire early, build your savings plan, and invest in real estate. No matter your goals, the key to making them happen is having a strong strategy in place.
Working with a professional financial planner or budgeting tools online can help you make a plan to achieve multiple strategies at one time. The more complex your expectations and desires are, the more valuable professional insight can be.
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People who are younger with a significant amount to invest
You’re younger, living at home with your parents, and you have a solid job with a good amount of “extra” income. You want to make the most out of those funds.
In situations where you have longer to retire, saving now is critical and valuable thanks to compounding interest. However, when you have a significant amount to invest, multiple strategies could be available to you.
People who need and want diversification
You’ve seen the stock market crash, heard that real estate is worrisome, and continue to watch big startups fail. You know the power of diversification and how it may protect you from these risks. However, you may be unsure how to plan for it.
You shouldn’t make financial decisions this impactful in a volatile investment market without professional guidance, then. Learning how to diversify is critical to preserving your wealth.
People caught up in trying to keep up with the crowd
You may be in a trap where you’re so busy buying the latest technology, getting a new car every few years, and taking dream vacations because everyone else does it, that it’s going to hurt you financially.
You shouldn’t be making retirement decisions on your own if you’re spending more on these areas than your budget allows or if you’re only focus is on the hear-and-now.
People who are dependent on their parents
You’re in your 20s or early 30s and still dependent on your parents financially. There are plenty of reasons why this could be the case, including poor financial literacy, health complications, or other struggles.
If you’ve relied on your parents (or others) for a long time, you may need some help getting the financial education and support you need to make better decisions now. Turning to a resource for financial management could help you make better decisions.
People with multiple retirement options
Your employer is offering a retirement plan with options. You have the money to put into an IRA, too. Which one is best for you?
When you’re looking to get the most out of any retirement planning strategy available to you, utilizing tools that can create forecasts with different strategies can help you make smarter decisions.
People with a lot of credit card and other unsecured debt
You’re drowning in debt, and you know most of it was avoidable spending. How could you possibly think about building a retirement plan?
When you’re in this position, you shouldn’t be making decisions about retirement plans yourself simply because you may need some help creating a plan to get out of debt as a primary focus. It’s important to create a savings plan early, but you’ve got to tackle your debt, too.
Sometimes, the best reason to get help with your retirement planning strategy is to make sure it gets done. When you hire someone to help you, it becomes their job to help you succeed, and that allows you to continue with your day-to-day life. Even if your financial health is solid, a pro can be a valuable investment.
FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.