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Maximizing Your Retirement – The Essential Role of an Experienced Investment Advisor

by Deniz Ellard

As you move closer to retirement, many experts recommend a more conservative investment portfolio allocation, with fewer stocks and more bonds. Your risk tolerance may dictate a different allocation, however.

You can’t control what your tax rate will be in the future or whether inflation will increase prices, but you can make sure you’re saving the maximum amount in your retirement accounts each year.

Risk Management

Risk management is the process of protecting assets and investments from potential loss. This can include many different things, such as inflation, market fluctuations, and credit risks.

retirement planning Wyckoff NJ advisor will start by assessing your risk tolerance and capacity on a questionnaire listing your current and future investments, pensions and income sources. The questionnaire also asks about your goals and how much time you have before those goals need to be realized. The advisor synthesizes all of this initial information into a comprehensive financial plan. This will cover your expected net worth in retirement and calculate reasonable withdrawal rates from your portfolio assets. It will also create simulations of best and worst-case scenarios, including the possibility that you will run out of money in retirement.

Asset Allocation

Asset allocation, or dividing your portfolio into different types of investments, is one of the most important decisions you’ll make. It impacts how your investment portfolio behaves and ultimately helps you reach your financial goals. Two major factors drive your asset allocation: time horizon and risk tolerance. The longer your time horizon, the more you can afford to invest in riskier assets such as stocks and equity funds, which typically offer higher rates of return than cash or bonds. For example, if your retirement is decades away, you can take on more risk since you have plenty of time to recover from market downturns and still reach your goal. However, many experts recommend periodically rebalancing your portfolio to ensure it remains aligned with your desired asset allocation.


Taxes can be a significant challenge in a client’s investment life. Advisors who are “tax-smart” – considering the impact of taxes throughout the investment process and coordinating with their clients’ CPAs to understand new interpretations of tax rules – can help them achieve potentially greater returns by minimizing the amount they have to give. This can be accomplished through strategies that reduce capital gains tax liability and maximize charitable giving. It also can mean addressing the impact of required minimum distributions and finding ways to alter their client’s withdrawal strategy to minimize taxes further in retirement. This often requires a close relationship between the financial and tax advisors.

Estate Planning

According to some advisors, middle-income earners should have at least three times their salary saved by age 40 and six times their salary by age 50. Maximizing yearly contributions, especially during the final year of employment, can help achieve those goals. A retirement planner will help you understand how much you need to save for a comfortable retirement and provide simulations of potential best- and worst-case scenarios. They’ll also address unforeseen expenses and the possibility of outliving your savings. In addition, a financial planner can review your current estate plan and ensure that it’s up to date. This includes identifying beneficiaries, specifying how assets are distributed and determining who will manage your estate after your death. This plan can prevent family members from fighting over your estate and help protect your family’s legacy.


Some financial advisors wear multiple hats to meet high-net-worth individuals’ and families’ retirement planning needs. For example, they may use their wealth management experience to help clients budget, maximize employer benefits, save for retirement, and choose insurance coverage. Many advisors in this capacity also hold a license to sell insurance products directly and may earn commissions for their recommendations. Alternatively, they may refer their clients to a licensed insurance agent who can sell them an individual policy on their behalf. Some advisors are fee-only, meaning they do not receive commissions on any financial products they sell or recommend to their clients. This helps avoid conflicts of interest.

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