No matter your financial situation, if you’re a senior or nearing retirement, you have specific financial concerns. You need to plan for the rising costs of health care, find cost-effective insurance, and arrange for end-of-life care.
Given the complex nature of their finances, many seniors choose to find a certified financial advisor (CFA) to help them navigate their retirement planning. If you’d like to take this route but aren’t sure how to find a financial advisor who is right for you, consider the following five points when selecting a senior financial advisor:
The National Association of Personal Financial Advisors (NAPFA) recommends the following steps to find the right advisor for you:
Many in the financial industry claim they’re financial advisors, but you’ll want to work with a certified professional. They are trained to deal with the specific challenges you face. A financial advisor for seniors specializes in planning for living on a fixed income, budgeting for long- and short-term health-care costs, investing in retirement accounts, and acting as an estate planning guide. The Certified Financial Planner board provides a list of certified advisors who specialize in financial advising for seniors.
When you find a certified professional, ask your financial advisor two questions: Is he or she required to act as a fiduciary and does he or she work for a flat fee, rather than on commissions. That means they’ll act in your best interest, rather than to generate higher fees. You can find a financial advisor who works on a fee-only basis on The National Association of Personal Financial Advisors (NAPFA) site.
Scams targeting older adults are on the rise. In 2021, 92,371 older adults were victims of fraud, resulting in $1.7 billion in losses. This is why financial advising for seniors is an increasingly important part of the services CFAs offer. In many cases, they act as the first line of defense against scams.
The good news is the Financial Industry Regulatory Authority has enacted rules in recent years to help seniors. Specifically, CFAs are now required to ask seniors if they would like to designate a trusted contact to be notified if something seems wrong with a transaction. Also, a “safe harbor rule” allows a broker who suspects exploitation to put a hold on payments while a situation is investigated.
Not only can CFAs walk you through the financial planning process, but they may help increase your financial returns. Nearly six in 10 of the people in the United States currently working with a financial professional are high-net-worth investors, according to a Morgan Stanley survey.
If you don’t think a financial advisor for seniors is quite right for you, a variety of options are available to help you with your financial planning.
Photo credit: iStock
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