Testing Image Alignment

Get the help you need for a more secure retirement

Most news stories about baby boomers and retirement have focused on the first wave of boomers turning 65 and getting ready to retire. But while the younger boomers aren't quite making retirement headlines yet, those in their late 40s are realizing what retirement will look like for them in a few years - and they're worried.

According to the Reclaiming the Future study by Allianz Life Insurance Company of North America (Allianz Life), 54 percent of 44 to 49 year olds are feeling totally unprepared for retirement. They also feel a strong need to take more control of their financial future, attain more financial security and reduce their financial vulnerability.

Their worries are not without cause. A July 2010 Retirement Readiness Ratings report from the Employee Benefit Research Institute (EBRI) shows that as many as 43.7 percent of younger boomers (ages 46-55) are at risk of not having enough retirement income to pay for basic retirement expenses or uninsured health care costs.

"The economic downturn woke up many Americans to the challenges of securing retirement income, but this younger boomer segment seems to have taken the lesson even more seriously," said Katie Libbe, vice president of Consumer Insights for Allianz Life.

"Our study also told us that security and guarantees with retirement-income solutions are now very important to Americans," said Libbe. "But there are so many options to choose from that it can be overwhelming. A financial professional can help you make sense of it all and create a financial strategy that works for you."

Working with a Financial Professional

Finding the right financial professional takes some time and effort on your part. A good financial professional will develop a realistic retirement strategy that helps meet your specific needs, puts that strategy into action, then monitors its progress and guides you on managing it.

A word of caution - the Financial Planning Association (FPA) says to be wary of those who call themselves financial planners but who appear more interested in pushing specific products at the expense of your needs and goals. There are a number of legitimate titles held by financial professionals (see sidebar), but you want to make sure you choose one who not only has the training needed, but who is also obligated to act in your interest.

Where to Start

Begin your search by getting references from friends and relatives. But don't stop there. You need to check their credentials, first.

Verify a financial planner's Certified Financial Planner (CFP) status and background with the Certified Financial Planner Board of Standards - www.cfp.net.
The FPA recommends checking with the Securities and Exchange Commission (www.sec.gov), state agencies, your local Better Business Bureau and CFP Board at 888.CFP.MARK (237.6275) to find out if there have been any complaints filed against the planner you are considering.
Questions to Ask

What kind of experience do you have advising on each of these topics - retirement, investment, taxes, estate planning, and insurance? Someone who has spent years setting up trust funds for the wealthy might not have the relevant experience you need.
Do you work with an independent custodian? The National Association of Personal Financial Advisors (NAPFA) says that your money should be held by an independent custodian company, not your advisor. Find out the name of the company, how to contact the appropriate people, and your account numbers. Make sure that checks you write will be made out to the custodian, not the advisor.
How are you paid? Financial professionals work under a number of compensation methods. For example, fee-only financial professionals do not receive commissions based on investment purchases. They charge a fee, based on services such as an hourly rate, an asset-based fee, or combinations of both. If the financial professional you're interviewing won't disclose how he or she is paid, find another candidate.
Do you have any questions for me? A good financial professional will find out more about you than just your income and net worth. Asking about your goals and your family will help them understand the bigger picture, and therefore help you meet your financial objectives. If they only ask about your money, it's time to move on.
By doing your homework and asking the right questions, you can find the right
professional who will help you shape your financial future and help make it more secure.

Financial Professional Designations

Terms such as financial analyst, financial advisor, financial consultant, financial planner, investment consultant or wealth manager are generic terms or simply job titles.

"Unfortunately, anyone can call themselves a financial planner or advisor," said Libbe. "Make sure you understand what kind of financial professional you really need, and be sure that they have the education and experience to serve you well."

Certified Financial Planner (CFP): Provides financial planning and advice on retirement, investments, tax and estate planning, employee benefits and insurance needs. They must pass college-level courses in those topics, then pass a two-day, 10-hour exam. They must also have a college degree and a minimum of three years of professional experience working with clients.
Personal Financial Specialist (CPA/PFS): A Certified Public Accountant who can also provide financial planning advisement in the areas of retirement planning, investment planning, goal setting, tax planning, and estate planning. These members of the American Institute of Certified Public Accountants must meet recertification requirements every three years.
Investment Advisor: Anyone who is paid to provide securities advice must register as an investment advisor with the Securities and Exchange Commission or relevant state securities agencies, depending on the amount of money he or she manages. Because financial planners often advise people on securities-based investments, many are registered with The Financial Industry Regulatory Authority (FINRA) as registered representatives. Investment advisors cannot sell securities products without a securities registration; only registered representatives may sell securities or investment products.
Preparing for Your Meeting

The Financial Planning Association (FPA) says there are a number of documents you'll need for a meeting with your financial planner. A comprehensive list may be customized by your planner for your specific needs.

Bank statements
Pay stubs
Check registers
Credit card balances
Mortgage or loan payment books
List of assets and liabilities
Completed expense worksheet
Wills, trusts, healthcare powers of attorney
Business agreements
Titles for homes, cars, real estate, etc.
Retirement account statements
Social Security statements
Pension benefit statement and booklet
Investment statements
Listing of available investment options in investment and retirement accounts
Stock options
Homeowner and automobile declaration pages
Life, disability or long-term care insurance policies
Business liability, director and officer insurance policies
Tax return
Tax estimate for next return (e.g., deductions, credits, etc.)
List of employee benefits