What Does a Retirement Planner Do?

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

A retirement planner is a professional who specializes in helping people create a retirement plan geared toward their specific needs and goals. This plan includes everything from current income and investments to future expenses and estate planning.

Note that there’s no specific retirement planner credential. However, some professionals — like Certified Financial Planners (CFPs®) — will call themselves retirement planners to show their expertise in the field. Some professionals also have designations like Certified Retirement Counselor® or Retirement Management Advisor®.

How Can a Retirement Planner Help You?

When you sit down with a retirement planner, you’ll generally discuss things like:

• Your preferred retirement timeline
• Your current and anticipated expenses
• Your assets and liabilities
• Your short- and long-term financial goals
• Your various sources of income (now and in the future)

Once the retirement planner has this information, they can help you make a personalized plan to get you where you need to be. This also involves figuring out:

• How much money you need to retire
• When you can realistically retire (and what you need to make that happen)
• How to manage your cash flow and income distribution

With that in mind, here’s a quick breakdown of the services retirement planners typically provide:

1. Cash Flow Management

One of the biggest fears people have when it comes to retirement is running out of money. A retirement planner can ease your concerns by figuring out your cash flow — both while you’re working and after you leave the workforce.

Retirement planners can give you advice on things like:

While nothing is set in stone, these professionals can help you get a clearer idea of your financial future — including projections of your benefits and expenses. They can use this information to then help you align your finances so you have enough to live comfortably (and stress-free) on your retirement funds.

2. Savings and Investments

Retirement planners also help you figure out things like:

• Withdrawal rates and rules for different accounts (like IRAs and 401(k) plans)
• Which annuities or other investment products would work best for you
• How to safeguard your investments in the event of a market downturn
• Which investment strategies are best for you
• Whether or not a Roth IRA conversion is a good idea

If you intend to leave behind something for your loved ones, a retirement planner can also work with you to determine how to stretch your savings or investments even further.

3. Insurance Planning

It’s important to understand your insurance needs in retirement. A retirement planner can help you understand:

• The type of health insurance you need
• If you need long-term care or life insurance
• The cost of your insurance

4. Taxes

Taxes are complicated at the best of times. Even after you retire, you’ll likely still be taxed on your income and assets. Some states, including Colorado and Utah, will even tax your Social Security income.

Retirement planners can help you understand exactly how your retirement income will be taxed — whether it’s Social Security, annuities, 401(k) plans or IRAs. They can also give you advice on ways to lower how much you pay in taxes.

5. Social Security and Medicare Benefits

Most people can start collecting Social Security benefits at the age of 62. However, you’ll only receive the maximum benefit amount if you wait until you’re 70.

Not everyone wants to wait that long, and that’s okay. A retirement planner can help you:

• Decide when to start claiming benefits and the pitfalls of claiming benefits too soon
• Advise you on the best ways to budget your Social Security income with other retirement income sources

The same goes for Medicare. Some people don’t have to pay Medicare premiums, but others do. Medicare Part B, for example, starts at $185 a month. You’ll need to budget for this potential cost — just in case.

6. Estate Planning

Do you plan to leave behind property or other assets after you pass away? If so, a retirement planner can incorporate estate planning into your overall plan. They can even help you with legal documents like wills and trusts.

Estate planning is helpful if you:

• Have multiple children
• Want your assets distributed a certain way
• Want to prevent legal disputes in your family after you pass away

7. Non-Financial Retirement Planning

Retirement planners don’t only work with you on the financial side of things. Some will also address non-financial elements of retirement, like:

• Where to live
• When to retire
• How to overcome challenges that come with aging (like healthcare needs)

You might be surprised at how much easier retirement becomes when you have a professional to provide the tools you need for a comfortable lifestyle.

Average Retirement Planner Fee

Retirement planners charge for their services in a number of ways, including:

• Flat fee
• By the hour
• Commissions for specific financial products
• Percentage of assets under management (AUM)
• Ongoing or retainer fee

Fees vary widely based on the professional and services needed — as well as how long you need them for. Here are some estimates based on the latest data from the AARP:

• Typical AUM fee: 0.25% to 1% per year
• Typical hourly rate: $200 to $400
• Typical flat fee: $2,500

Check around and compare your options to make sure you’re getting the most bang for your buck. Be sure to ask for an explanation of any fees before hiring a retirement planner.

How to Choose a Retirement Planner

So, you know what a retirement planner does. The next step is to choose a good one. Here’s a list of questions to ask to find out if a specific planner is the right fit for you:

• What professional designations do you have? Look for ones like CFP®, CRF® and Retirement Income Certified Professional® (RICP®).
• Which areas of retirement planning do you specialize in? It’s a broad field. Some planners are experienced in estate planning, while others are more adept at taxes or insurance. Choose a professional who can best meet your needs.
• Which services or products do you offer? Some professionals will try to sell you products — like annuities or insurance. Ask yourself whether you need any of these.
• What fees do you charge and what’s your fee structure? Make sure you’re only paying for what you need. You can base this in part on your total net worth or assets.

You may also want to consider how experienced the retirement — or financial — planner is in working with people like you. Everyone is unique, but it doesn’t hurt to have someone who’s been around the block and helped others in a similar situation as you.

Share This Article: