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5 Warning Signs You're Not Prepared for Retirement

Get Smart with Your Assets

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SmartAsset is a personal finance technology company that features a financial advisor matching service. Financial Advisors who appear on SmartAsset are from companies with which SmartAsset receives compensation. SmartAsset takes into consideration wealth and location to determine how to match users with advisors. SmartAsset doesn't include the entire universe of Financial Advisors.

Preparing for retirement is a major undertaking that can determine your financial trajectory for years to come. 

One fact to consider is that a 2019 Northwestern Mutual study found that U.S. adults who work with a financial advisor report “substantially greater financial security, confidence and clarity than those who go it alone.”

The value of working with a financial advisor varies by person and advisors are legally prohibited from promising returns, but research suggests average additional investment returns can range from 1.5% to 4% more each year. 

SmartAsset’s new tool makes it easy to find the right financial advisor near you in just a few minutes. This exclusive, no-cost tool matches you with up to three local fiduciary financial advisors that have passed a rigorous screening process. We confirm each is registered with the U.S. Securities and Exchange Commission (SEC) or the appropriate state regulator, possess the proper licenses and have no pending or valid regulatory disclosures within the past 10 years.

Being aware of these five major warning signs when planning for retirement can help you find peace of mind, and avoid years of stress.

1. You're not working with a fiduciary advisor.

By definition, a fiduciary is an individual who is ethically bound to act in another person’s best interest. This obligation eliminates conflict of interest concerns and makes an advisor’s advice more trustworthy. 

If you're working with a financial advisor who is not a fiduciary and constantly pushes investment products on you, it's time to find an advisor who has your best interest in mind.

2. You haven’t checked your 401(k) balance in the past 6 months.

You should be checking your 401(k) account regularly. You should be aware of how your money is invested and your tolerance for risk and make adjustments as necessary. A financial advisor can assist you in this.

3. You haven’t estimated how much you’ll need to retire.

Surveys have repeatedly shown significant numbers of Americans in their 30s, 40s and even 50s have no retirement savings. If you plan to travel and have a comfortable lifestyle, you need to figure out exactly how much you’ll need to save and adjust accordingly.

4. You’re planning on electing Social Security benefits at 62.

The SSA clearly indicates that the earliest age you can start receiving Social Security is 62, and you’ll lose 30% of the benefits for that year. Your benefits at age 62, 66 or 67 are not your maximum benefits, though. Benefits increase by 8% per year every extra year you wait. The maximum benefit kicks in at age 70.

5. You haven’t formalized a retirement plan with a financial advisor.

While the value of working with a financial advisor varies by person and advisors are legally prohibited from promising returns, research suggests average additional investment returns can range from 1.5% to 4% each year.

Voya Financial found that 79% of people who use an advisor said they “know how to pursue achieving their retirement goals.” The study also found that 59% of those who use an advisor have calculated how much they need to retire, while 52% established a formal retirement investment plan.

Chances are, there are several highly-qualified financial advisors in your town. However, it can seem daunting to choose one. 

Our no-cost tool makes it easy to find the right financial advisor for you. Now you can get matched with up to three local fiduciary investment advisors that have been rigorously screened for regulatory disclosures and to confirm their licenses. The entire matching process takes just a few minutes.

Follow These Steps to Get Matched With the Right Advisor for You

1. Simply enter your ZIP code below.

2. After you enter your ZIP code and answer questions about your financial goals, you can compare up to three top advisors local to you and decide which to work with.

3. Enjoy a better financial future!