Whether you've been wondering about boosting your investments' rates of return or are concerned that your financial affairs are a bit too complicated for your next of kin to handle, it may be time to seek advice from a financial professional. Financial professionals help their clients create strategies to develop their wealth, from optimizing their taxes to setting retirement savings goals.
But how do you know whether it's time for you to seek professional financial guidance? Learn more about some of the unique benefits that come from working with a financial professional or another specialized financial professional.
Benefits of a Financial Professional
One of the most valuable holistic benefits a financial professional can provide is their ability to help you articulate your goals—and then work towards them. It can be tough to conceptualize abstract financial plans, like saving for retirement or a child's college education. Working with a financial advisor can help you put a dollar amount on these goals and work backward to see what you need to do today, next year, and ten years from now to pursue them.
Another benefit of a financial advisor involves tax planning. There are often many things you can do to reduce your taxable income (and total tax paid), from contributing to a traditional IRA, 401(k), Health Savings Account, or 529 educational account; bundle your medical expenses; or sell low-performing investments to take the capital loss deduction.[1] Working with your financial advisor can help you take advantage of the various tax benefits that are available to you.
Financial advisors can also help steer you toward will and estate planning. Although it's always a good idea to use a licensed attorney to draft your last will and testament, a financial advisor can help guide you through the questions you'll want to ask your attorney, as well as point out some ways you can potentially structure your will to reduce any tax burden on your heirs.[2]
Finally, a financial advisor can help you navigate the "new normal" that has arisen with the COVID-19 pandemic. From unexpected job losses to higher future health expenses, COVID-19 has thrown a wrench into many families' plans; by working with a financial advisor, you'll be able to tweak your current plans to better anticipate your future needs.[3]
When is it Time for a Financial Advisor?
Many people tend to think that they don't need a financial advisor until they have amassed a significant amount of assets or have reached a certain age. But most people can benefit from a financial professional's advice in many different stages of their journey, whether you're just starting out in your career, beginning to prepare for retirement, or already retired and hoping to stretch your nest egg a bit further.[4]
You also can set your own relationship with a financial advisor—whether you'd prefer an advisor who checks in on you (and your investments) regularly or would rather contact your advisor on an "as needed" basis when you have specific financial questions.
Wes Garner, CRPC
Principal Wealth Strategist
(281) 269-8669
wgarner@tdecu.org
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
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Sources: https://millennialwealthllc.com/the-intangible-benefits-of-working-with-a-financial-advisor/
[1] https://www.kitces.com/blog/hierarchy-tax-preference-savings-vehicle-roth-high-income/ [2] https://www.fidelity.com/viewpoints/wealth-management/finding-an-estate-planning-attorney [3] https://www.cnbc.com/2020/10/06/advisors-adapt-as-pandemic-has-changed-the-advisor-client-experience.html [4] https://www.investopedia.com/managing-wealth/when-should-you-hire-financial-advisor/
Sources
https://www.kitces.com/blog/hierarchy-tax-preference-savings-vehicle-roth-high-income/ https://www.fidelity.com/viewpoints/wealth-management/finding-an-estate-planning-attorney https://www.cnbc.com/2020/10/06/advisors-adapt-as-pandemic-has-changed-the-advisor-client-experience.html https://www.investopedia.com/managing-wealth/when-should-you-hire-financial-advisor/
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