Retirement Planner or Financial Planner – Which Do I Need?

Retirement planning graph analysis.

There is a difference between a financial planner and a retirement planner in the same way there is a difference between a family practice doctor and a cardiologist. They both start off with the same basic training, but one has gone on to become a specialist. Just like your heart, you need your retirement money to last the rest of your life; if there was ever a time to find a specialist, this is it.

Financial planners are trained to help you accumulate and invest your money. Retirement planners have additional training to help you figure out how to use this money to generate reliable paychecks in retirement.

Retirement Planner Areas of Expertise

Retirement planners must have an in-depth knowledge of Social Security, pensions, taxation of retirement income, annuities, reverse mortgages, health care options, and the pros and cons of different withdrawal approaches.

Specifically, retirement experts will have an in-depth knowledge of all of the following:

  • Social Security claiming strategies which can show you if you should begin benefits at 62, or wait until later. In addition, you can see what type of spousal, ex-spousal, or survivor benefits apply to your situation.
  • Pension distribution options that project out the age you might begin your pension, whether you should take a lump sum or annuity distribution, and what type of survivor option to choose.
    • Retirement withdrawal strategies that show you which approach will result in the lowest amount of taxes paid over your retirement years.
    • Investment approaches that can help you reduce sequence risk and protect you from a severe market down-turn.
    • Decisions that help protect you from running out of money in retirement.
    • How inflation is likely to impact you in retirement.
    • Long term care insurance pros and cons.
    • Annuities, and whether such a product would be beneficial to your plan.
    • Reverse mortgages and when it makes sense to use them.
    • How much to budget for health care in retirement and what to expect from Medicare.

An experienced retirement planner can help you figure out if you have enough to retire now, what changes you might need to make, how much to save, what types of accounts to use, and what mistakes to avoid.

Retirement Planner Credentials

Our financial advisors are both Certified Financial Planners (CFPs), and Retirement Management Analysts (RMAs). The RMA designation is acquired by going through coursework that was developed by the Retirement Income Industry Association. It teaches you how to focus on minimizing retirement risks while working to increase the certainty of the outcome. That’s important! You want reliable income in retirement.

There are two other retirement planning credentials, the RICP and the CRC that some financial planners carry. The RMA designation has a more rigorous academic background, which is why we choose that particular education program over the other options.

I know I wouldn’t see my family practice doctor if I had a heart problem – it just wouldn’t be a smart thing to do. In the same way, if you’re within ten years of retirement, or already retired, and you are talking to a financial planner that doesn’t have retirement planning credentials, think twice before you hire them.

Retirement Planner Compensation

Ideally, you will work with a no-commission retirement expert – someone who works for you, just like a CPA or an attorney does, rather than someone who is paid by selling investment or insurance products.

The retirement planners here at Sensible Money are all fee-only, no-commissioned advisors. We all use the process outlined in the 2nd edition book Control Your Retirement Destiny. We are experienced, credentialed retirement planners and we work with folks all across the United States by using screen sharing technology and Box, a secure document sharing service.

The analysis and work that goes into creating a retirement income plan is far more complex than the work that goes into creating a traditional financial plan that is geared toward accumulating assets. You only retire once (hopefully). We think that makes the extra work worth it.

As you near retirement, talk to a specialist. It just makes sense.