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Wealth & Well-Being

5 Life Transitions and Times When a Financial Advisor is Needed

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When it comes to your financial future, the decisions you make today can change the course of your life. Choosing the right investment strategy, ongoing tax planning, establishing an estate plan, analyzing and potentially purchasing life insurance, considering long-term care, preparing for retirement, etc.—navigating these complex matters can quickly become overwhelming.


There are particular events and transitions in life when having a trusted thinking partner to help think through financial decisions can be invaluable. The following is a list of situations in which the help of an expert could significantly improve your financial and personal outcome.

1) You are Nearing Retirement: As many pre-retirees near closer to retirement, they become filled with self-doubt regarding their retirement plan. Have I saved enough to not outlive my assets? How will I create my retirement paycheck to cover my expenses? Have I adequately prepared for the possibility I may one day need care? Maximizing retirement income can be tricky, but a trusted financial advisor can help you build a withdraw timeline, mitigate taxes, decide when it is best to begin taking social security benefits, and position your investments in such a way that manage risk for the longevity of your portfolio.

2) You are Getting a Divorce: Amidst the emotional turmoil of a divorce, retaining a sense of clarity regarding your finances can be difficult. And when it comes to a divorce settlement, there aren’t any second chances. One of the most overlooked aspects of divorce settlements is the taxes an individual will have to pay on awarded assets. Not only can a financial planner help you to organize your finances for your new future, they can overlook your divorce settlement to ensure that any assets you stand to gain will be fair and equitable after taxes have been assessed.

3) You Have Lost a Spouse: The loss of a spouse can be one of the most devastating transitions an individual will encounter in his or her lifetime. The grief can be unbearable and there may be financial decisions that demand attention. For some widows, this may be the first time in their lives they are charged with handling their own finances. Your financial advisor can help you with the process of setting a timeline for financial decisions, meeting any important deadlines, settling your spouse’s estate, filing the necessary paperwork, and ensuring you have a steady source of income as you move forward.

4) You Inherited Money or Received a Windfall: There is a reason why so many lottery winners and second, third, and fourth generations of wealth end up in bankruptcy: managing a sudden influx of money is challenging, both in financial skill and emotional readiness. The right financial advisor will assist you in evaluating both your short and long-term goals and help devise a roadmap to get you there.5) You Manage Your Own Investments: The biggest threat to an investor’s success is often himself. For the past 25 years, DALBAR, a leading financial services market research firm, has been performing a Quantitative Analysis of Investor Behavior (QAIB) which measures “the effects of investor decisions to buy, sell and switch into and out of mutual funds over short and long-term timeframes.” Time and again, their research illustrates that individual investors panic when markets turn south. They subsequently sell their assets when the market is low, and want to return again when the market recovers. But selling low and buying high is the exact opposite of a successful investment strategy. Financial advisors can (a) help investors maintain perspective when the market conditions are unfavorable and (b) keep them on track to meet their financial goals despite a volatile financial climate.

But the right advisor does so much more than just guide you to make wise financial choices during these transitions, the right advisor supports you while you manage the financial and emotional aspects of these changes, as well. Ideally, your advisor will:

• Reduce the complexity and overload of these life events• Empower you to face these new circumstances with confidence and optimism• Undertake some of the less pleasant tasks• Provide ongoing encouragement• Save you time and energy

At Northstar Financial Planning, we are Certified Financial Transitionists® and Registered Life Planners who have been specifically trained to approach both the financial and behavioral aspects of our clients’ financial planning needs. We understand the mental and emotional toll that life’s transitions can place on an individual and seek to empower those experiencing such change to see these events as opportunities for a brighter future. If you or a loved one is experiencing, or anticipates facing, one of the above transitions, please feel free to contact us today. One of our advisors would love to meet with you and discuss your possibilities.

Written by Robin Young in collaboration with Lexicon Content Development

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