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Four Reasons to Hire a Financial Planner

Managing long-term finances in a changing economic landscape.

No matter how old we are, having financial security for our families and ourselves is important. Parents want long-term security themselves and for their children’s future, and work hard to do it. From getting finances together for college savings, life insurance, will and estate planning, 401(k) and retirement savings and everything in between, you can set your family up for financial success with a little research, time, and when possible the help of a financial planner.

“For those who reach out for help, we think there’s a lot of value a good planner can add to a relationship,” says Greg Ostrowski, certified financial planner at Scarborough Capital Management. “Investment strategy and wealth building is just one piece of the puzzle, but there’s also life! Funding college, adequate insurance, mitigating taxes, paying down debt, establishing a budget, estate planning, succession planning for a business—you name it,” he says.

“Everyone is different, so I feel strongly that having a passionate advisor in your corner can help drive better long-term outcomes.”

Let’s take a look at four different types of financial savings and how financial planners can help navigate the waters to provide smooth sailing for money matters.

Giving it the Old College Savings Try
College savings can seem like an overwhelming process to parents in early stages as they look ahead to the future or their child’s education, but the earlier the process is started, the less money needed monthly to save on future costs. A 529 plan is a college savings plan that offers tax- and financial-aid benefits and can be used to save and invest for K–12 tuition in addition to college costs.

Fidelity Bank undertook a College Savings Indicator Study that showed the average 2017 college graduate who took out loans graduated with a little more than $39,000 in student loan debt. The study recommends these steps in preparing for college savings:

Start saving early. Money invested in a 529 plan can increase tax-free and be taken out tax-free for educational expenses at accredited institutions.

Treat college savings like a monthly bill. Try to increase the amount you put toward it over time.

Talk to kids early about expectations around their contributions to college expenses. It’s only fair to involve kids directly in all financial discussions that involve their future.

“Today’s parents have learned from their own experiences paying for college and managing student loan debt,” says Melissa Ridolfi, vice president of retirement and college leadership at Fidelity. “These parents clearly value the importance of a college degree and likely want to help shield their children from a heavy student debt burden after college.”

Saving for a Retiring Future
A 401(k) is a retirement savings plan sponsored by an employer that lets workers save/invest a piece of their paycheck before taxes are taken out. Taxes aren’t paid until the money is withdrawn from the account. Many families might worry they don’t have enough money to even think about retirement planning, but it doesn’t take a lot, says Richard Graves, of Richard C. Graves, CPA and Associates.

“$10 a week is better than none,” says Graves. “Whether that amount is going to estate planning, college savings or retirement or is split 3 ways, something is being done.” But, he says, “Until you start, you can’t move your plan.”

Often employers will match contributions to your 401(k), yet Graves says people don’t always take advantage of that money. “That is a wrong choice. Often in the plans, even if you put in $10 a paycheck, the amount is doubled by the employer. Where else can you double your money every week? So, start your engine with $10, and make that plan start to grow.”

“For those just starting out,” says Ostrowski, “It’s critical to take ownership of your future. Warren Buffett once said: ‘Someone is sitting in the shade today because someone planted a tree a long time ago.’ When it comes to your money and your future, being diligent and purposeful can pay off in the long run.”

Having the Will to PlanGettyImages 872002236

Preparing a will is a daunting prospect, especially for young parents. No one wants to think about it, but should the worst happen, being prepared with even the simplest of wills will be a huge step in taking care of your family after you’re gone.

A financial planner can help you set up a will, and then continue assisting with estate planning with decisions and documents concerning holding your property in a living trust, making health care directives, setting up financial powers of attorney, naming beneficiaries for bank accounts and property, and making arrangements for end of life.
Check out freewill.com for online help with will planning. Or head to your financial planner for more in-depth help.

Taking Care of Your Life . . . Insurance
Life insurance is one expense that can be especially tough to navigate. If you’re not sure of how much coverage you need, there are online calculators that can determine amounts based on your income.

A general rule is that individuals want to have ten times their salary in life insurance in order to help take care of their beneficiaries. Websites like financialmentor.com, nerdwallet.com and forbes.com have great articles on how to navigate the waters of finding good life insurance policies.

“Save early, save often,” says Ostrowski. “Do everything in your power to at least save enough to get your company’s 401(k) match if they provide one. Be as judicious as possible with debt. Don’t use your investment accounts or retirement accounts as a piggy bank. Engage with advisors or platforms on your terms—those that you can best relate to or engage with. Don’t manage long-term money with a short-term point of view. Not to sound too much like a parent on all this, but I’ve never heard anyone say ‘boy, I wish I didn’t save so much.’”

Find Help
Finding a financial planner could be critical to helping you plan your family’s financial future and save you money in the long run. Here are some tips:
Check with your CPA. He or she may know of local financial planners you can contact; personal recommendations are always good.
If you are seeking additional financial help, consider a Certified Financial Planner (CFP). CFPs are trained in 72 areas of financial expertise and must accrue thousands of experience hours prior to certification. Visit letsmakeaplan.org for info on how to find a Certified Financial Planner.
The Financial Planner Association (FPA) also has assistance and more information available on their website at plannersearch.org

—Mary McCarthy

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