Your financial world is anything but static. Virtually every year, something in your life changes, whether that’s receiving a raise, entering a new tax bracket, paying more rent, or canceling a streaming subscription.
And none of that even considers the massive financial implications of major life events.
Each new chapter of your life is often paired with new financial decisions, whether that’s pairing your finances with your spouse’s or getting ready to enter retirement. And you might or might not feel equipped to handle those decisions on your own. Fortunately, if you need help, help is there—in the form of financial advisors, who are educated in all the many financial issues that life throws at us.
How do you know when it’s time to talk to an advisor? Well, the answer isn’t the same for everyone, but there are several common trigger points that often warrant professional advice. If you’re approaching one of these milestones, it might be time for you to schedule an appointment.
Popular Times to Hire an Advisor
“The best time to hire a financial advisor is yesterday; the second-best time is today,” or so the cliché goes.
But in truth? I can’t list a specific time or age where it makes perfect sense for every single person to start working with a financial professional. People simply have different timelines.
Even the average age a person starts working with a financial advisor is a moving target. According to Northwestern Mutual’s 2024 Planning & Progress Study, the average age to start working with a financial advisor is 38 … but the average Millennial working with a financial advisor started at age 29.
In some cases, people start seeking out financial advice because they simply think they now have enough money to warrant it. However, many others finally make the call in response to a number of major life events—including the following milestones.
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1. Age 59½
“That’s a mighty specific age.”
It is! And for good reason!
Age 59½ is an important age as it pertains to retirement plans. Most notably, that’s the age at which you can begin making penalty-free withdrawals from your 401(k), IRA, and a host of other accounts.
But it’s also the age at which many employer-sponsored retirement plans (401(k)s, 403(b)s, etc.) allow their employees to execute “in-service rollovers.” We traditionally think of rollovers as only happening when you leave a job—you take your assets from your old 401(k) and transfer them to a new employer’s 401(k) or into an IRA. However, once you reach age 59½, some employers will allow you to perform “in-service rollovers,” in which you move your money from an employer-sponsored retirement plan into an IRA while you’re still working with the company.
Like with a traditional rollover, you’d perform an “in-service rollover” to move your money from a workplace retirement plan with very limited investment options to an IRA with a wide variety of them, giving you more choice in how you manage your retirement funds.
And whether you’re considering taking withdrawals or want to exercise your newfound retirement-investing freedom, a financial advisor can help you make educated decisions.
Related: How Much Does Financial Advice Cost?
2. When You’re Nearing Retirement
The median retirement age for Americans is 62, but people can retire in their 40s or in their 80s. They might retire with a fully fledged plan they’ve been tinkering with for decades, but sometimes people retire earlier than planned because of a sudden health issue or job loss.
Regardless of when you plan to retire, or how much time you think you have until you call it a career, if you think you see your retirement on the horizon and don’t already have a financial advisor, then it’s a good time to start talking to one, for any number of reasons:
- You don’t know what amount of savings you’ll need to have at retirement.
- You don’t know if you’ve factored in all of the necessary costs into your retirement budget.
- You’re not sure how to create multiple estimates based on different inflation rates and market returns.
- You know your savings goal but are behind and not sure of how to catch up before you retire.
- You’re not sure what your withdrawal strategy should be once you retire.
Basically, if you’re anywhere near retirement and have any uncertainty about the path ahead, it’s a great time to seek out guidance.
Related: When Should You Take Social Security?
3. When You’re Getting Married
Many people think about financial advisors as being integral in retirement planning, but they can be useful when you’re going through any major life event that could have an impact on your finances … such as marriage.
You and your partner might couple some of your finances prior to marriage, but that typically goes to a new level at marriage—accounts are shared, tax statuses change, and financial goals shift from individual to shared. And managing this can be difficult when spouses have conflicting ideologies, like if one prefers to focus more on the present while the other prioritizes the future.
Also, no two marriages are identical. Some couples will have only one working partner, while others will be a dual-income household. Those who plan to have children may want to get a headstart on college funds and other monetary preparations.
Thus, personalized planning is key.
A financial advisor can help you with a host of issues, including taking out life insurance policies, setting beneficiaries, understanding any tax consequences, combining and managing retirement assets, estate planning, and more.
Related: How to Choose a Financial Advisor
4. When You’re Getting Divorced
Well, they can’t all be happy circumstances.
The financial complexity of a divorce varies by couple. Assets often have to be divided, which can be simple if there’s no jointly owned property and few commingled accounts. But there are plenty of complicating factors, such as …
- Lots of jointly owned assets
- Shared interest in a business or real estate
- One or both individuals receiving a large inheritance while married
- Child support
And following a divorce, newly single ex-spouses need to reconfigure their financial goals and plans based on their individual income.
Divorce is an emotionally draining process, so it can be worth having a neutral party that can help with financial planning during a turbulent time.
Related: Are You Retirement-Ready? 10 Questions to Ask Yourself
5. When Your Spouse Passes Away
Another difficult life event that often comes with a great deal of financial upheaval is the death of one’s spouse.
On behalf of your spouse, you’ll need to start the probate process, contact insurance companies, inform credit reporting agencies, and prepare their final tax filings. For yourself, you’ll need to reconfigure your budget, adjust your investment strategy, and update your will. You’ll also need to adjust your health insurance (unless it was separate) and properly file your taxes as the surviving spouse. You might also become eligible for Social Security survivor benefits and need to contact the Social Security Administration.
There are seemingly endless ways one’s finances change after a spouse passes. A financial advisor not only can provide proper guidance during this time—they can free up precious hours you need to take care of yourself and loved ones.
Related: What to Do Before Your Spouse Passes Away
6. Receiving an Inheritance
Your finances can change substantially if you receive an inheritance, especially if it’s a large one.
To start, there may be heavy tax consequences for your newfound wealth. A financial advisor can determine the best ways to minimize any tax hit and optimize your taxes going forward. That very well might include assets being stored in tax-advantaged retirement accounts, which have special withdrawal rules you’ll need to follow to avoid being penalized. An advisor can help a person manage and invest these inherited assets.
Too often, inheritances quickly disappear because the beneficiary doesn’t have expertise in how to manage those funds. A financial advisor can bridge that knowledge gap.
Want to talk more about your financial goals or concerns? Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you.
