With people living longer and retirement costs increasing, there is little margin for error when planning your retirement.
You might think the biggest risk you face is the possibility of losing your money in the market; when, in reality, your biggest risk is getting bad retirement planning advice.
Stock market losses are only temporary, but bad advice can cause irreparable damage to financial future.
You need sound advice to ensure income sufficiency for the rest of your life.
Here are the 5 biggest mistakes to avoid when choosing retirement planning services in Maryland:
1. Falling for Sales Pitches
At a time when the majority of Americans are panicking because they are not on track to a secure retirement, retirement products are proliferating as seen on late night commercials and through email campaigns.
They offer very appealing promises and the sales pitch is very convincing.
You should never consider any retirement or investment product unless it is being offered in the context of a well-conceived financial plan that considers your specific objectives, risk profile and your overall financial situation.
Make sure your retirement planning advisor is credentialed in professional financial planning.
2. Focus on Accumulation not Income Planning
Many retirement planning services offer plans on how to accumulate retirement assets, but fewer focus on the disciplines of retirement income planning and managing for potential liabilities.
It’s one thing to accumulate a nest egg; it’s entirely different, and more complex, to plan for the distribution of those assets over a lifetime with full consideration for inflation, taxation and accounting for the unexpected.
You should look for retirement planning services that offer comprehensive management of assets, liabilities, and income distribution.
3. Working with a Product Salesperson
You need sound, objective, conflict-free retirement planning advice. Product sales people, such as stockbrokers, and insurance sales reps are paid to sell products.
Some will offer their version of a “needs-based analysis”, but their objective is to sell a product.
The only way you can be sure you are receiving unbiased, objective advice is by working with an independent, fee only financial advisor, preferably one who is a Registered Investment Advisor (RIA).
An RIA is governed by fiduciary law and is legally required to provide planning advice that is purely in the best interest of the client.
4. Not checking their Background and Experience
In choosing a planner, you are, in essence, hiring someone who is going to be intimately involved with your finances.
Experience over several economic and market cycles is very important.
It is also critical, however, to check their background for any disciplinary actions taken by the regulatory bodies such as the SEC.
And, do not work with any advisor without having the opportunity to obtain references from several of his or her clients.
5. Not Ascertaining their Knowledge and Expertise
Retirement planning is a specialty encompassing a broad body of knowledge in areas of investment management, risk management, income distribution planning and taxation.
It’s important to work with advisors who demonstrate a commitment to the highest levels of education in their field.
Look for professional credentials as evidence of their commitment, such as a Chartered Financial Analyst, Certified Financial Planner, Certified Retirement Counselor (CRC), the Retirement Income Certified Professional (RICP), or Retirement Management Analyst (RMA).
These credentials require passing a rigorous study program as well as continuing education to remain in good standing.
The Way We Do Retirement Planning
I hope this has been handy for some of the things you should seek to avoid when employing a retirement planning firm.
When we put together your retirement plans, we make sure that we are using all of the information we put together when meeting with you – goals, risk tolerance, desired outcomes, etc…
The way that we put together your plan is a lot more customized and hands on for us because we do it by intensive personal contact and interviews, instead of using computer generated questionnaires.
This produces a better result which is tailored to meet your personal retirement goals.
We invite you to check out Calvert Investment Counsel Retirement Planning Services, give us a call today at 410-435-3270 or click here to schedule online, and start getting results that will last.