Money and Your CFP
Make your money work for you. Money market accounts, certificates of deposit and savings bonds are all ways to save money. When deciding which savings vehicle to use to save for retirement, it is important to balance the amount of risk ie amount of potential returns (or loses) with the need for the access to the cash as well as financial sustainability. Clearly outlining your financial goals is important. A Certified Financial Planner (CFP) is an excellent source of information to engage this process. CFP can provide (1) expertise, (2) objectivity and (3) timely choices.
I know, I know, there are a lot of you out there saying, "I got this. I do not need to consult with a professional." I understand, it's your money and you have things under control. However, there is a benefit to employing professionals who have additional expertise. I am sure that you see value in going to a professional that knows more about how to heal your body, a doctor. Or you go to the barber shop or the hair dressers to get your hair cut because if you didn't we would all have crazy hairs. Going to a financial professional is simply consulting with a a person who has financial expertise.
There is also something to be said for objectivity. You are emotionally involved with your finances, your CFP is not. They may be able to clearly see an alternative that is so simply that it will make you slap your forehead and say, "why didn't I think of that, it is so simple and makes so much sense."
Sometimes there are circumstances that may require financial changes or the creation of legal documents or purchase of an insurance policy in order to protect you or your family from unintended consequences. A good CFP will take the time to listen to you and explain the risks and benefits of taking or not taking specific actions.
(3) Timely choices
Outlining your financial goals is important to do and the earlier you start the better. When you find the right CFP who cares about you reaching your financial (and life) goals they can be a great informational resource and can outline timely choices to help reach your goals.
For example, someone who is about to retire from their career and they mention in conversation, "I have been saving a good bit of money and I am planning to consult a CFP once I retire." Oh my, they have got it all backwards. They need to consult a CFP before they retire. As soon as feasibly possible would be ideal. All of their circumstances should be examined and then the alternatives or choices can be outlined of when is makes healthy and financial sense to retire. Maybe they can retire earlier then expected, for example tomorrow:). Or maybe they need to wait until after the first of the year so they can make adjustments to their retirement vehicles and save a ton of taxes. If someone waits until after they retire to examine the circumstances surrounding their retirement sometimes the choices are limited.
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Page Maintained by: Jennifer Shulman
Jennifer is committed to helping her clients as well as other folks improve their daily financial circumstances by providing simple financial solutions.