A lot of people function under the misconception that a financial advisor is only needed if you are extremely wealthy. Others think that they are only there to sell you stocks or other options.
While they can certainly assist with these things, there are several practical reasons to consult a financial advisor at every income level.
Today, we’re going to clear up the haze and provide a few good, solid reasons why a financial advisor is a very good idea.
Financial planning for all aspects of life
Financial advisors are there to help you protect and get the most out of your hard-earned money. Here are some examples of the range of financial planning hurdles where a good advisor can provide critical assistance and we’ll expand on each point further:
- Building a financial foundation
- Dealing with unexpected cash
- Parental care plans
- Estate planning
- Marriage or divorce
- Protecting yourself at higher income levels
To start building a foundation with your very first job
The best time to get started with a financial advisor is when you get your first job. A single consultation, for instance, can help you to get the most out of your new employer’s benefits and help you get started on building that all-important savings account.
You might not need to visit them again for years, but that one consultation can help to ensure that you start planning for your future right away.
Help with unexpected cash
Sometimes we get an unexpected windfall. This doesn’t just mean winning the lottery, it could be something like an inheritance or even a fortunate pay raise in return for your hard work.
This can lead to lifestyle changes that simply aren’t realistic or sustainable and before you know it, that extra cash is gone.
A good financial advisor can help you to use this money properly, so you can still celebrate and enjoy some of the benefits of your new status but you won’t have to worry about waking up and finding that all that ‘surprise’ money is now gone.
Financial planning for taking care of your parents
As your parents get older, concerns for their care can seem overwhelming. Can you ensure that their care is paid for if they want to stay in your childhood home?
In-home care or retirement home costs are expensive but a financial advisor can help you to navigate the hurdles involved to get the best care possible for aging parents.
This is not something you have to do on your own. The costs might be more manageable than you think and an expert financial planner can make all of the difference in the world.
Estate planning is important
No one lives forever. When you’ve spent a lifetime building up your finances, you must protect what you can.
Taxes can take a huge bite out of your estate without proper planning and you also need to be sure that your beneficiary choices are clear. It’s not something that we like to think about but it is crucial.
While a lawyer can certainly draft you up a standard will, if everything isn’t done perfectly then it might be contested and not just by family. What if the government wants to go after your hard-earned assets?
A good financial advisor can help you to protect your estate and to avoid potential issues that drain and deplete a lifetime of work and saving.
Closeout any potential loopholes and head-off any disputes immediately with a little shrewd financial planning. You earned these finances through a lifetime of work, so they should go exactly where you want them to and nowhere else.
Planning for your retirement
Retirement is another area where a financial planner can be a godsend. You don’t want to wait until the last minute, however.
Typically, the critical time is considered to be in your 50’s, but starting even earlier can help to ensure that your golden years may be enjoyed to the fullest without worry that money is going to become an issue.
A good rule of thumb is to have a consultation with a financial advisor when you turn 40.
A single consult can open you up to a world of options that you might not have known were available. This lets you start early on your retirement and you can always adjust these options as needed.
Protecting finances when you marry or divorce
This is a sensitive topic, but it is a good idea to consult with a financial advisor when you are planning on getting married or going through a divorce.
A financial advisor can help you outline the tenets of a pre-nuptial agreement or help facilitate the financial bounce back after a divorce, where some assets have been divided.
As the old saying goes, “hope for the best, but plan for the worst.”
Protecting yourself when you reach a certain income level
When you hit a certain income level there is an amazing rush that comes with the experience. A financial advisor can help you to navigate the red tape of complicated taxes that you’ve never had to deal with before.
They can also tell you about financial strategies to protect you in a volatile market. Properties are another good example where value can rise or fall at the drop of a hat.
The best way to think about it is to consider your own areas of expertise. As a professional yourself, you know that nothing can compare to experience in a particular field. Why should financial planning be any different?
Besides…why manage these things on your own? One of the perks of reaching a high-income level is getting to worry less and to enjoy life more. A financial advisor is one of the best ways to help make that happen.
Some final words on the benefits of a financial advisor
As you can see, a financial advisor can be beneficial in all walks of life. Whether you are dabbling in Wall Street or starting your first job, getting the advice of an expert can help you to build up a substantial amount of savings that you’ll be enjoying for the rest of your life.
Financial planning is crucial not only toward building your future, but also to help reduce financial stresses that can and do occur during everyday life. Consider consulting a financial advisor for a single consultation and you can see for yourself.
Image by: [Steve Buissinne]