How to Choose a Top Retirement Advisor: What to Look For Before You Retire
Saving for retirement and living in retirement require different skills. For decades, the job is to contribute and invest. Once paychecks stop, the job becomes turning savings into reliable income, deciding which accounts to draw from, managing taxes on every withdrawal, and making the money last for an unknown number of years. That is why choosing a top retirement advisor deserves careful thought.
This guide covers what a retirement planning advisor should help with, the questions to ask, and why tax planning is one of the clearest ways to tell advisors apart.
Start Here: A Complimentary Retirement Wealth and Tax Review
Compound offers a complimentary, no-obligation wealth and tax review for people approaching or already in retirement. It may include:
Income sources: Social Security, pensions, investment income, and part-time work
Accounts: 401(k), IRA, Roth, taxable, and deferred compensation, and how they fit together
Tax picture: recent returns and planning opportunities in the years ahead
Goals: travel, family support, charitable giving, and legacy
Request your complimentary retirement wealth and tax review.
What Does a Retirement Planning Advisor Do?
A good retirement planning advisor helps answer questions that are difficult to solve with a spreadsheet:
When can I retire? Modeling spending, savings, and income sources under different assumptions
How much can I spend? Building a sustainable withdrawal strategy that accounts for inflation and market declines
Which accounts should I use first? Coordinating withdrawals from taxable, tax-deferred, and tax-free accounts
When should I claim Social Security? Weighing claiming ages against other income and life expectancy
What about a pension? Comparing lump sum and annuity options where available
How will I pay for health care? Planning for costs before and after Medicare eligibility
How do I protect against a bad market early in retirement? Managing sequence of returns risk with cash reserves and allocation choices
Ongoing wealth management brings these decisions together in one plan that is updated as your life changes.
Why Tax Planning Separates the Best Retirement Advisor Candidates
Many retirees are surprised by how much taxes influence their income. Withdrawals from traditional IRAs and 401(k) plans are generally taxed as ordinary income. Social Security benefits may be partly taxable depending on your other income. Higher income can also increase Medicare premiums through income-related adjustments. Required minimum distributions begin at an age set by law, which has changed in recent years, and can push income higher than you need.
These rules interact, which is why the best retirement advisor for you is likely someone who models taxes alongside investments. Strategies worth discussing may include:
Roth conversions in lower-income years, such as the years between retirement and when Social Security or required distributions begin. Our guide to converting pretax savings to Roth explains how to evaluate this.
Withdrawal sequencing that spreads taxable income more evenly over time.
Qualified charitable distributions for eligible IRA owners who give to charity.
Asset location, placing investments in the account type where their tax treatment may be most efficient.
Compound pairs retirement planning with tax planning and preparation so these decisions are evaluated together instead of in separate offices.
To see how growth and taxes may affect savings over time, try the Compound calculator. Results are hypothetical and for illustration only.
What Is Sequence of Returns Risk?
Sequence of returns risk is the possibility that a market decline in the first years of retirement does lasting damage, because withdrawals are being taken from a shrinking portfolio. Two retirees with the same average returns can end up in very different places depending on when the weak years arrive. A retirement planning advisor may address this with a cash reserve, a flexible spending plan, and an allocation designed around near-term income needs.
Credentials and Standards to Look For
There is no official ranking of the top retirement advisor in any market. Instead, check:
Fiduciary duty. Registered investment advisers owe clients a fiduciary duty when giving investment advice. Ask whether the advisor acts as a fiduciary at all times. Learn more about working with a fiduciary financial advisor.
Credentials. Designations such as CFP or CPA indicate specific training and ongoing education requirements. Credentials alone do not ensure a good fit, but they are a useful starting point.
Background. Review the firm's Form ADV at adviserinfo.sec.gov and check individuals on FINRA BrokerCheck.
Understand How the Advisor Is Paid
Retirement advisors may charge a percentage of assets, a flat or retainer fee, hourly fees, or receive commissions on products such as annuities. Ask for the total annual cost in writing and whether any product recommendations generate additional compensation. Our practical guide to advisory fees explains common structures.
Questions to Ask a Retirement Planning Advisor
How do you build a retirement income plan, and how often do you update it?
How do you decide which accounts to withdraw from each year?
Who handles tax planning, and how do you coordinate with my CPA?
How do you plan for a market decline early in retirement?
How do you coordinate with my estate attorney on beneficiary designations and legacy goals?
Planning for Retirement in Wisconsin
Wisconsin retirees often have additional questions, such as how pension income is treated at the state level, whether to keep a lake home or cabin, and how to plan if they split time with another state. Our guide to choosing a financial advisor for retirees in Wisconsin covers these topics.
Compound works with pre-retirees and retirees throughout Wisconsin, including Milwaukee, Madison, Green Bay, Appleton, Eau Claire, Wausau, and Sheboygan, as well as surrounding areas. Request a complimentary retirement wealth and tax review.
Frequently Asked Questions
How do I choose a top retirement advisor?
Look for a fiduciary with retirement income planning experience, clear fees, and a process for coordinating taxes with investments. Review Form ADV and meet with more than one advisor.
What is the difference between a financial advisor and a retirement planning advisor?
A retirement planning advisor focuses on the transition from saving to spending, including income planning, withdrawal strategy, Social Security timing, and taxes in retirement.
When should I start working with a retirement advisor?
Many people benefit from starting five to ten years before retirement, which allows time to adjust savings, plan Roth conversions, and prepare an income strategy.
Why do taxes matter so much in retirement?
Withdrawals, Social Security, required distributions, and Medicare premiums can all be affected by your taxable income. Coordinated planning may help manage taxes over your full retirement.
Compound is a registered investment adviser. Registration does not imply a certain level of skill or training. This article is for informational and educational purposes only and should not be construed as personalized investment, tax, or legal advice. Tax laws are complex and subject to change. Strategies discussed may not be suitable for everyone, and there is no guarantee that any strategy will achieve its objectives or reduce taxes. Calculator results are hypothetical, are not guarantees of future results, and do not reflect any actual investment. Investing involves risk, including possible loss of principal. Diversification does not ensure a profit or protect against loss. Please consult your tax, legal, and financial professionals before acting on any information in this article. For more information, see Compound's Form ADV, available at adviserinfo.sec.gov.
About Compound Wealth
Many financial decisions involve more than one area of expertise. Compound Wealth provides integrated tax planning, wealth management, accounting, and business transition services so clients can evaluate financial decisions within a broader planning framework. This collaborative approach supports thoughtful conversations across multiple areas of financial life.
