One way to be sure your planner is heading you in the right direction is to see if the advice is built around your personal financial situation.
Everyone’s financial life is different, we all have different financial goals, objectives and priorities.General advice not specific to your individual needs is not as helpful as comprehensive personal advice built around your financial and investment goals.
A good retirement planner will focus advice around you and your financial priorities.
The advice from the planner should include goal setting and action plans. Even if you already set financial goals and have appropriate action plans in place, ask for an update and a review of your current plans.
You should create a list of questions and concerns that you may have before visiting with the retirement planner. A good planner will ask you many detailed questions so be prepared to answer questions as well as ask questions.
Here are some 401k details from retirement planners that you can review and use when you meet with your personal retirement planner.
- Whenever you can, maximize your 401k contribution limit.
- For 2010, the contribution limit is $16,500 with a catch-up contribution of $5,500.
- If your employer matches your personal 401k contributions, you get free money; which is why maximizing your contributions is so important to building up your 401k account.
- If you cannot afford to maximize your contribution, invest as much as you possibly can, never invest zero, invest some amount.
Goal Setting & Action Plans
In addition to retirement advice, work with your retirement planner on setting financial goals and action plans to achieve those goals. Here is one example you can use:
- Goal: find extra money to invest into your 401k account.
- Action plan: by cutting expenses you may find extra money.
- Action plan: find ways to cut expenses.
- Action plan: track your expenses to find ways to cut them.
- Write down every single thing you spend.
- When you see your spending in writing, you will have a more clear idea of where your money is going. You may be surprised.
- Regardless of whether you are working with a retirement planner or are looking to increase a 401k contribution limit, you should review your expenses at least once a year.
- You may uncover expenses you had last year that are no longer necessary this year; so an annual review just makes good financial sense.
Retirement planners need to review your entire portfolio, not just your retirement accounts. Your portfolio is all connected like a puzzle and retirement is just one segment of the whole. By tweaking one piece, there can be a trickle down effect to the other pieces. So be sure your planner reviews your entire portfolio plus all of your financial goals, priorities and objectives.