When to Hire a Financial Planner

When to Hire a Financial Planner | Staying Financially Healthy | Reverse Your Thinking® Mortgage with Mathius Marc Gertz Husband and wife are sitting at table home. Considered on calculator spending family budget with a financial planner.
When to Hire a Financial Planner | Staying Financially Healthy | Reverse Your Thinking® Mortgage

When to hire a financial planner? According to the Employee Benefits Research Institute’s 2022 retirement poll, one in every three working persons and retirees now works with a professional financial planner. Almost half of those without a planner intends to hire one in the future.

A life event, such as marriage or divorce, is frequently a clue that it is time to hire a planner. There are, however, other events. Including the fact that finances are becoming more challenging, people do not have enough time or knowledge about investing, and even members of the same home do not agree on a shared money strategy.

Major Life Events

Here are some things that impact your financial situation or perspective include:

  • Marriage: The blending of two sets of financing can be challenging. Setting agreed-upon financial goals can still be tricky.
  • Divorce: You may need assistance determining how to live on one income rather than two.
  • Becoming a parent: This alters your spending habits and provides you with new financial goals, such as paying for college.
  • Inheriting money: You may need assistance determining how to invest your windfall during this emotionally difficult period.
  • Become a Caregiver: When you take on the role of caregiver for an older parent, your income and expenses may shift. You may need to rethink your retirement strategy.
  • Starting a business: This involves risks, and you may need to compensate for these risks by being more careful with your money in other ways.
  • Selling a business: When you sell a firm, your assets and income may change. Both outcomes will impact how you manage money and investments in the future.
  • Starting a new job or being promoted: This provides you with more money to help you attain your financial goals. You may require assistance determining how to put that extra cash to good use.

After a major life event, you may require something temporary. Usually, the result would be a financial plan that you could utilize on your own. Remember that financial planners can provide both one-time consultations and continuing assistance.

Assume you’ve recently discovered that you can begin contributing to your 401(k). You might employ a financial planner to assist you in making your first investments based on age, risk tolerance, and goals. It would then be up to you to implement those investing decisions and monitor your progress.

Increasingly Complex Finances

Even if nothing else in your life changes, your money will become more complicated with time. You earn more money, contribute more to your 401(k), contribute more to your HSA, purchase life insurance, and so on. You might start to doubt if you can handle everything on your own.

Financial planners can be highly beneficial in this case. The best ones will examine your assets and devise strategies for getting the most out of your investments, lowering your risk, or doing both.

Lack of Time or Expertise

Managing your money and investments might feel like a second job you may not desire. If you don’t have time to do your research and keep an eye on your portfolio, you can engage a planner to handle it for you. Your planner handles the tedious work, and you weigh in when the time comes to make a decision.

Similarly, you may struggle with confidence when making investment decisions. After all, investments might be difficult to understand. A skilled planner can assist you in making educated decisions and teaching you how to manage your money effectively.

Family Conflict Over Strategy

In a recent study by the American Institute of CPAs, nearly three-quarters of persons who are married or living together believe money is a source of stress in their relationship.

If you and your partner disagree about money and regular spending, you may be unable to move forward with a wealth plan. You could hire a financial planner to assist you in resolving these issues by providing experienced, unbiased guidance.

It may also be beneficial to consult with a trustworthy 3rd party, such as an accredited financial counselor or a family therapist. Even if you aren’t aware of it, an accredited financial counselor can help you figure out how your feelings about money influence you.

What Do Financial Planners Charge?

People frequently inquire, “Does working with a planner require a specific net worth?” No, in most circumstances. Some planners have a minimum net worth requirement, although the vast majority do not.

Still, hiring a financial planner isn’t a good idea if you’re living paycheck to paycheck. However, you might benefit from planner assistance if you have $100 or $10,000 per month to help you attain your financial goals. This counsel could be a one-time meeting to build an investment plan or a long-term partnership.

Big Financial Goals but No Plan

If you have money to invest and financial goals to achieve but no clear plan, it might be when to hire a financial planner. The correct planner can help you feel less stressed about money. Planners also help to make decisions more straightforward, and ultimately lead to a brighter financial future.