Getting A Jump Start On Your Retirement Planning Using A Financial Planning Service
Posted on: 22 May 2019
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Retirement planning can be a frightening subject if you are someone who is not particularly financially savvy. However, it is a subject that you need to tackle if you do not want to end up in your golden years without any funds with which to comfortably live your life. So, what you need to do is look into using a financial service that will put you in touch with a talented and skilled professional who will have the experience and knowledge to guide you on how to invest wisely. This way, you won't end up in retirement without a comfortable financial cushion. When you visit a financial planner, you will want to make sure that you get answers to the following questions.
Understanding Tax-Efficient Investing
One of the most important things you will need to understand is the concept of tax-efficient investing. You don't want to put money into a traditional IRA if it would be more beneficial to invest in a Roth IRA. Likewise, you do not want to invest in corporate bonds if you want the tax-efficiency of municipal bonds. These are somewhat sophisticated concepts that you will want to make sure you have advice on. If you simply head out and invest in things without concern for their tax implications, you could very well end up costing yourself quite a bit of money. So, make sure that this is one of the things you discuss with your financial planner.
Deciding What Asset Classes To Invest In
Next, you will want to make sure you know which asset classes to invest in. It's not enough to know that you are going to be purchasing stock, you need to know which sort of company you are buying stock in. Are you planning on buying stock in a large-cap company or a small-cap one? Will you look towards foreign companies, or are you more focused on domestic investing? Are you going to stay more focused on bonds, instead?
How To Allocate Your Contributions
The final thing you will want to discuss with your financial planner is how to allocate your contributions. You are not going to want to sink all of your investment dollars into a single stock, so it's important to discuss how to create a diversified plan. Your planner will discuss different methods (such as putting a percentage into stocks and a different percentage into bonds, depending on your age and time to retirement). All of this is going to be individually tailored to your specific needs.