I’m Close to Retirement. Is Hiring a Wealth Manager Worth It?

While many investors elect not to use a dedicated advisor, for others, having a second set of eyes on their finances can improve the quality of important financial decisions.

As you approach retirement, the question of whether to hire a wealth manager becomes increasingly pertinent. The transition from accumulating assets to drawing down your savings requires a strategic approach to help ensure your finances last throughout your retirement years. But is hiring a wealth manager worth it?

Let’s explore how a professional can make a significant difference, even if you're starting late with retirement planning.

Understanding Wealth Management

A wealth preservation manager is a financial professional whose role is to help you grow, manage, and protect your wealth over the long term. Wealth managers offer a range of services, including investment advice, tax planning, retirement planning, estate planning, and more. They take a holistic approach to managing all aspects of your finances, ensuring that your financial strategies align with your life goals.

In recent years, the importance of wealth preservation has grown significantly, reflecting the increasing complexity of financial markets and the need for personalized financial strategies. The focus on preserving Americans’ wealth has been a hot topic of late, its popularity and growth is driven by the rising demand for personalized financial advice, particularly among high-net-worth individuals who seek tailored solutions to navigate the complexities of wealth preservation and growth.

Moreover, recent studies show that individuals who work with a wealth manager are more likely to achieve their financial goals. In fact, one study found that 75% of individuals who work with a wealth manager report they feel that they have or will achieve long-term financial security. This underscores the value of professional guidance in securing financial stability and success.

Wealth managers not only help you invest wisely but also help ensure that your entire financial ecosystem—from savings and investments to taxes and estate planning—works together seamlessly. By taking a long-term perspective, wealth preservation managers can help mitigate risks, optimize your portfolio, and provide peace of mind as you work towards financial independence and a comfortable retirement.

The Importance of Wealth Management in Retirement

One of the primary goals of wealth management is to help ensure financial security throughout retirement. This involves creating a plan that addresses your income needs, inflation, healthcare costs, and other expenses. This has become even more important as the average life expectancy continues to increase. The Centers for Disease Control and Prevention (CDC) reports that the average life expectancy in the U.S. is around 78.8 years. With many living well into their 80s and 90s, retirement savings need to last longer.

According to a recent study, American adults believe $1.46 million is needed for a comfortable retirement. This is a 15% increase from the $1.27 million reported last year. Over five years, the 'magic number' has jumped a whopping 53% from the $951,000 target Americans reported in 2020.

Furthermore, healthcare costs continue to rise and have become a major concern for retirees. According to Fidelity’s 2023 Retiree Health Care Cost Estimate, an average retired couple age 65 may need approximately $315,000 saved (after tax) to cover healthcare expenses in retirement.

Wealth preservation managers aim to help you generate various sources of retirement income, such as pensions, Social Security, and investment withdrawals, to help cover these types of expenses.

Investment strategies will also shift significantly as you approach retirement. Wealth preservation managers adjust your portfolio to reduce risk while still aiming for growth, helping ensure your assets last throughout your retirement.

Benefits of Hiring a Wealth Preservation Manager Close to Retirement

As you approach retirement, hiring a wealth preservation manager can offer numerous benefits, helping ensure that your financial future is secure and your retirement goals are met. Here are the key benefits:

Personalized Financial Planning: Wealth managers provide tailored financial plans based on your unique situation, goals, and risk tolerance. They help create a comprehensive retirement strategy that aligns with your lifestyle and future needs.
Tax Efficiency: Wealth managers implement tax-efficient strategies to help minimize your tax burden. They can guide you on the best ways to withdraw funds from various accounts, manage required minimum distributions (RMDs), and optimize Social Security benefits to help maximize your after-tax income.
Risk Management: As you approach retirement, managing risk becomes crucial. Wealth preservation managers assess your risk tolerance and adjust your financial plan to mitigate potential risks, helping ensure your savings last throughout retirement.
Estate Planning: Wealth managers assist with estate planning, helping you create wills, trusts, and other legal documents to help ensure your assets are distributed according to your wishes. This planning also helps minimize estate taxes and provides for your heirs efficiently.
Optimized Investment Strategies: Wealth preservation managers are highly experienced in managing investments, helping ensure your portfolio is well-balanced and diversified. They can shift your investment strategy towards more conservative options as you near retirement, protecting your capital while still aiming for growth.
Continued Financial Oversight: Retirement is not a static phase; it requires ongoing financial management. Wealth managers provide continuous oversight and adjustments to your financial plan as market conditions or personal circumstances change.
Access to Knowledge and Resources: Wealth managers have access to a wide range of financial tools, resources, and networks. Their knowledge can open up investment opportunities and strategies that you might not be able to access on your own.
Emotional Support and Peace of Mind: Navigating financial decisions can be stressful, especially as you near retirement. Wealth managers offer emotional support and peace of mind by providing guidance and taking the burden of financial management off your shoulders.

Choosing the Right Wealth Preservation Manager

Choosing the right wealth manager is a crucial step in ensuring your financial future is secure and aligned with your retirement goals. Here are the steps to help you find the wealth preservation manager that best suits your needs:

1. Assess Your Financial Needs and Goals

Identify Your Objectives: Clearly outline your financial goals, whether it’s retirement planning, estate planning, tax management, or investment growth.
Determine Your Financial Situation: Understand your current financial status, including assets, liabilities, income, and expenses.

2. Research Potential Wealth Managers

Ask for Recommendations: Seek referrals from friends, family, or colleagues who have had positive experiences with wealth managers.
Read Reviews and Testimonials: Look for reviews online and testimonials from current or past clients.

3. Evaluate Their Experience and Expertise

Years in Business: Consider wealth managers with substantial experience, particularly those who have weathered different market cycles.
Specialization: Ensure the wealth manager has experience in areas that match your specific financial needs, such as retirement planning or tax strategy.
Client Base: Look for wealth managers who typically work with clients in similar financial situations to yours.

4. Understand Their Services and Approach

Range of Services: Ensure they offer a range of services that cover all aspects of your financial planning needs.
Investment Philosophy: Understand their approach to investing and ensure it aligns with your risk tolerance and financial goals.
Communication Style: Ensure their communication style and frequency match your preferences.

5. Conduct Interviews

Prepare Questions: Have a list of questions ready about their experience, services, fees, investment philosophy, and how they will handle your specific needs.
Assess Compatibility: Use the interview to gauge how comfortable you feel with them and whether they understand your financial goals and concerns.

6. Review Their Performance and Track Record

Past Performance: Ask for examples of how they have helped clients achieve their financial goals.
Client Retention: High client retention rates can indicate client satisfaction and the wealth manager’s reliability.

7. Ask for References

Speak to Current Clients: Contact current clients to get firsthand accounts of their experiences with the wealth manager.
Client Testimonials: Read or request testimonials from clients who have similar financial goals.

How NJM Wealth Preservation Strategies Can Help

As you approach retirement, securing your finances becomes paramount to help ensure a comfortable and worry-free future. NJM Wealth Preservation Strategies is dedicated to providing financial planning and wealth preservation management services that cater to your unique needs and goals. Our team of experienced wealth managers, led by Nic J. McLeod, a second-generation financial advisor with 20 years of experience, is committed to helping you navigate the complexities of retirement planning with confidence and peace of mind.

A Plan as Unique as You

At NJM Wealth Preservation Strategies, we understand that every individual's financial situation is unique. We take the time to get to know you, your aspirations, and your concerns. This personalized approach allows us to create tailored strategies that address all aspects of your financial life. Whether it's optimizing your investment portfolio, planning for healthcare costs, or strategizing tax efficiency, our holistic approach helps ensure that every detail is taken care of. Our goal is to help you achieve financial independence, so you can enjoy your retirement years to the fullest.

Our range of services is designed to provide you with the expertise and support needed to secure your financial future. Here’s how NJM Wealth Preservation Strategies can assist you as you near retirement:

Personalized Retirement Planning: Crafting a customized retirement plan that aligns with your goals and lifestyle.
Investment Management: Optimizing your portfolio to balance risk and reward, helping ensure steady growth and capital preservation.
Tax Efficiency Strategies: Implementing tax-efficient withdrawal strategies and managing required minimum distributions (RMDs) to help minimize your tax burden.
Estate Planning: Assisting with the creation of wills, trusts, and other estate planning documents to help ensure your assets are distributed according to your wishes.
Healthcare and Long-Term Care Planning: Planning for potential healthcare costs and long-term care needs, helping ensure you are financially prepared for any eventuality.
Risk Management: Assessing and mitigating risks to protect your assets and helping ensure financial stability.
Ongoing Financial Oversight: Providing continuous monitoring and adjustments to your financial plan as your circumstances or market conditions change.

With NJM Wealth Preservation Strategies, you can rest assured that your financial future is in capable hands. Our experienced advisors are dedicated to providing you with the highest level of service and expertise, helping ensure that you can confidently navigate your retirement journey. Trust us to help you achieve financial security and peace of mind as you embark on this new chapter of your life.