How to Choose a Financial Advisor for Retirement: Pick the One Who Plans Your Income

The advisor who built your savings was paid to grow your balance. In retirement you need someone who can turn that balance into a monthly income, protect part of it from the market, and keep the tax bill down. When working out how to choose a financial advisor for retirement, look for one who specializes in retirement income planning.

You're at the edge of retirement, and the advisor who helped you get here says the plan stays the same: stay invested, stay the course, let the portfolio do the work. Nobody has told you how much you can take out each month, which account it comes from, or what happens to that number in a bad year.

The Advisor Who Got You Here Was Paid to Grow a Balance

You met with your advisor once or twice a year, reviewed the balance, compared your funds to their benchmarks, and kept buying through the downturns. It worked. Your savings grew.

That is accumulation planning. Its job is to grow the pile, and a bad year is manageable because you're still adding money rather than taking it out. During your working years, you worked for your money. In retirement, your money has to work for you, and the measure of success is no longer the balance. It is the income the balance can pay you, every month, for the rest of your life.

Picture a golden goose. The savings are the goose. The income is the eggs. An accumulation plan keeps fattening the goose and never asks how many eggs it lays. Retire on that plan and you end up eating the goose: selling assets in a down market to cover the bills.

An advisor who only knows accumulation keeps growing the balance, because that is their training. This is what I call the Accumulation Advisor problem: not bad advice, but the right advice for the wrong phase of your financial life.

How to Choose a Financial Advisor for Retirement: Five Questions That Reveal Everything

Many advisors call themselves retirement specialists. Ask these five questions.

1. How will you turn my savings into monthly income, and how much of it is protected from the market?

The answer should describe an income floor: a portion of your savings positioned so your essential bills are covered no matter what the market does, with the rest invested for growth. Once the bills are covered, you stop making emotional decisions with the rest of your money. If the answer is "we'll take a sustainable withdrawal rate from the portfolio", you are hearing an accumulation plan with a withdrawal bolted on.

2. Which account do I draw from first, and why?

The order you pull income from your accounts decides how much of it you keep. Pull from a pre-tax account at the wrong time and more of your Social Security becomes taxable, and your Medicare premiums rise the following year. An income plan is a withdrawal order, written down, across every account you own. If your advisor can't show you yours, they haven't built one.

3. How do you manage IRMAA?

IRMAA is the Income-Related Monthly Adjustment Amount, the Medicare premium surcharge that applies when your income crosses set thresholds. Cross one by a single dollar and your premiums rise for the whole year, for each spouse, straight out of your retirement income. As an IRMAA Certified Planner, I spend much of my planning time here. If your advisor has never heard of it, move on.

4. How does my Social Security claiming date fit the income plan?

Social Security is the one inflation-adjusted income source many retirees already own. There are thousands of claiming strategies, and the wrong choice can cost a household hundreds of thousands of dollars over a lifetime. A National Social Security Advisor runs your household's numbers inside the income plan rather than picking a date from a break-even chart.

5. Are you a fiduciary, in writing, for all services?

Many advisors are held only to a suitability standard, which lets them recommend what pays them best as long as it is acceptable for you. A fiduciary is legally required to act in your interest. Get it in writing, for every service they provide.

The River Crossing No One Warned You About

Think of retirement as crossing a river. On the far bank is a steady income you can live on without watching the market every morning. From where you stand the crossing looks simple, but the water holds risks you can't see from the shore: sequence of returns risk, IRMAA surcharges, Social Security timing errors, Required Minimum Distributions, and a health event that forces asset sales at the wrong time. Every one lands on your income.

You need a guide who knows where the rocks are. A boat on its own doesn't get you across.

Over 90% of the people who walk into our office are carrying more risk than they realize. Portfolios often carry 50% to 600% more risk than the client's measured tolerance, usually because nobody revisited the allocation when the income phase began.

Find Out What Your Savings Can Pay You

If you are within five years of retirement and unsure whether your current advisor is building an income plan or managing a balance, start with a Gap Analysis: a plain look at what your current plan pays you each month, which accounts it comes from, and what happens to the number in a bad year.

At New Horizon Retirement Solutions that begins with a Discovery Session. I listen first, then look at where your assets are held and whether the plan is built to grow a balance or to pay you an income. You leave knowing what your savings can pay you, whether or not you decide to work with us.

Book a Discovery Session: https://www.newhorizonretirements.com/book