Getting Help Without Getting Taken

Financial Planners:What Are Your Needs?

Posted on Tuesday, June 21, 2011

Before you beginning looking for a financila planner its a good idea to put some thought into what type of help you need, where you are and where you want to be;

• Compute your net worth - If you have under $100K you may want to continue to focus on these first four steps and saving before hiring a professional. If you’ve accumulated over $100K professional help is a good idea. Once you’ve accumulated over $250K tax and estate planning issues may also apply.

• Think about your goals; buy a home, send kids to college, retire with ‘x’ $ a year to live on, etc

• Establish a budget, outline your debts and, if necessary, devise a plan to conquer them

• How much money you think you can save to invest each year

• How involved you want your advisor to be – If you have no idea where to start, you may want help developing an overall plan. If you’re clear on your goals and how to save, you may only need help choosing the right investments (i.e. a true ‘planners’ verses an ‘investment manager’).
With this basic starting point, the right financial planner can help you connect the dots by refining your goals and advising you on how to best invest (investments you have/should have, levels of risk, return you need, all based on your future wants and need and what you can change to better afford them).

A good financial planner will give advice as to all of the following:
• How much you need to save
• What you need to differently
• What types of retirement accounts to use (IRA, ROTH, 401(k), etc.),
• What type of mortgage you should have
• What type and how much insurance you need (this would include life insurance, long term care insurance, disability, and some planners also give advice on property and casualty and health insurance)
• How much to keep in your emergency fund
• What changes might improve your tax situation
• What rate of return you will need to earn to achieve your goals over a given time frame
• Whether it makes sense for you to pay off your house

In addition, many financial planners provide estate planning advice and tax planning services.


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