The Top 9 Ways People Near Retirement Use Fiduciary Advisers

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Financial adviser
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Editor's Note: This story comes from Wealthramp.

Financial uncertainty is one of the biggest sources of stress among Americans in or approaching retirement.

Not knowing what your expenses will be, especially if you or your spouse needs long-term care.

Uncertainty over whether your combined income sources will allow you to live the way you want to or whether you’re investing your retirement savings in ways that enable it to last for potentially 25 years or more. Uncertainty over how to minimize the impact of capital gains taxes and investment expenses.

And concerns over how to discuss your wealth distribution intentions to your family without causing conflicts.

Fortunately, professional help is available. A qualified, fully vetted fee-only fiduciary adviser can help you address all of these issues and more.

What can they do for you, and what will you get for the fee you pay, year in and year out? The best way to get your money’s worth out of a fully vetted fee-only fiduciary adviser is to learn how other people are using theirs. Here are examples.

1. To make sure you won’t run out of money in retirement

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One of the biggest questions retirees or those approaching retirement worry about is whether their various sources of income from Social Security, pensions and 401(k) plans will be enough to let them live the way they want to when they retire.

A fully vetted fee-only fiduciary adviser has the objective “fresh eyes” to review your investment strategy, stress-test your income assumptions and projections and analyze current and future cash-flows to give you the “big picture” of what you may be able to do with what you have now, and what you may need to do to make sure you still have it later.

2. To figure out how much you can afford to spend in retirement

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If you have a 401(k) plan or traditional IRA, you’ll need to start taking required minimum distributions (RMDs) when you reach age 72. But it isn’t always easy to figure out whether you can “get by” with the minimum or need to withdraw more to meet your spending needs.

A fully vetted fee-only fiduciary adviser can work collaboratively with you to show you the potential short and long-term impact of different withdrawal scenarios so you’ll get a better sense of how long your retirement savings will need to last.

3. To create a ‘paycheck for life’ strategy

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If your retirement accounts are almost fully invested in bonds or cash by the time you’ll retire, there’s a good chance that your nest egg will actually lose value over time since returns won’t keep up with inflation.

A fully vetted fee-only fiduciary adviser can review your portfolio and recommend an appropriate mix of stocks, bonds and cash that help provide the income and liquidity you need today while giving your nest egg a greater chance to continue providing the same or even more income decades from now.

4. To keep your portfolio aligned with your retirement goals

Female Investment Adviser and Client
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Entrusting your investments with a fully vetted fee-only fiduciary adviser can help ensure that your portfolio is constantly being monitored, adjusted and rebalanced in a tax-efficient manner to reflect your unique financial objectives, timeframe and risk tolerance.

They’ll also audit your accounts to identify ways to replace higher-cost mutual funds with lower-cost index funds and ETFs that offer similar returns.

The fees you pay a fee-only fiduciary financial adviser may pay for themselves when you consider the thousands of dollars in capital gains and ordinary income taxes and investment expenses you’ll no longer have to pay every year once your portfolio is fully optimized.

5. To preserve and grow your wealth during a major life transition

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Divorce. The death of a loved one. The lifetime financial support needed for a child with special needs. All of these life events present financial challenges that most people don’t have the time or desire to deal with.

A fully vetted fee-only fiduciary adviser can work with you to come up with strategies and solutions to address these emotionally draining transitions, as well as help you avoid making costly tax mistakes during events such as a windfall you’re expecting from the sale or a home, an inheritance, or the exercising of stock options.

6. To educate you and your family on critical financial issues

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Chances are that different members of your family have varying levels of financial and investment knowledge.

A fully vetted fee-only fiduciary adviser can serve as your family’s financial educator, providing age-and-lifestage-appropriate guidance and resources to help them understand the importance of saving intelligently for retirement, investing for long-term goals rather than gambling on quick profits, protecting their assets from creditors and Uncle Sam, and creating a plan to transfer their wealth to their spouse, children, or favorite causes when they pass on.

7. To deliver better results by providing dynamic financial planning that doesn’t end at retirement

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Your financial challenges don’t end the day you leave the workforce. In many cases, new challenges emerge. When to start taking Social Security benefits. What kind of Medicare coverage to sign up for. Whether long-term care insurance makes sense. Whether it makes economic sense to sell your house and move somewhere else.

A fully vetted fee-only fiduciary adviser can walk you through all of these and other scenarios and adjust your financial plan accordingly as you begin a new chapter in your life.

8. To reduce inter-generational conflicts

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Discussions about estate planning and wealth distribution cause more friction between parents and their children and grandchildren than any other issue.

Chances are high that everyone who is expected to receive a share of this legacy or play a role in how it may be earmarked for charities will have conflicting points of view.

A fully vetted fee-only fiduciary adviser can serve as an impartial, independent mediator during these heated intra-generational discussions and help defuse the issues that threaten to tear families apart.

9. To provide greater peace of mind

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Can worrying about your personal finances take years off your life? Probably not.

But if you’re like many people, uncertainty about your financial future — or even the surprise expenses you need to pay for right now — may keep you awake at night.

Partnering with a fully vetted fee-only fiduciary adviser can help relieve your stress, since you’ll have the peace of mind in knowing that an experienced professional will always be watching your back and available to answer your questions and address your concerns to make sure you’re doing the right things with your money.

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