How to Choose a Retirement Financial Advisor
Planning for retirement involves more than just reaching a savings target. You also need to decide how to turn your savings into income, when to take government benefits, and how to manage taxes over time. With so many moving parts, it can be hard to know if you’re on the right track.
A financial advisor who specializes in retirement can help bring clarity to these decisions. They focus on creating a plan that fits your needs, helps avoid costly mistakes, and supports your long-term goals. In this article, we’ll cover what these advisors do, how they can help, and what to look for when choosing one.
What Is a Retirement Financial Advisor?
A retirement financial advisor helps people prepare for the financial side of retirement. They focus on converting your savings into a steady cash flow, managing taxes in retirement, and making informed decisions about government benefits, such as CPP and OAS.
Not all financial advisors specialize in retirement planning; many focus primarily on managing investments. However, investments are just one component of a comprehensive retirement plan. A retirement-focused advisor coordinates your investments, benefits, tax planning, and spending to support your retirement goals effectively.
How Financial Planning With a Retirement Planner Can Help
A retirement planner helps bring structure to one of the most complex stages of your financial life. Rather than working off general rules of thumb, they tailor a plan to your income needs, tax situation, and unique goals.
There are several benefits of retirement planning, including:
Creating an income plan that supports your lifestyle and adjusts as your needs change.
Choosing the right timing for government benefits like Canada Pension Plan (CPP) and Old Age Security (OAS).
Outlining a tax strategy so you keep more of your money.
Matching your investments to your income needs and risk tolerance.
Preparing for risks like market downturns, rising costs, or surprise expenses.
Decisions which seem small can have a huge impact on your finances. For instance, choosing the wrong age to start CPP could mean losing out on nearly $100,000 in lifetime income.
By coordinating all aspects of your retirement income, a financial planner provides you with a clear understanding of how and when you can retire. This clarity helps build your confidence, allowing you to retire with peace of mind.
If you're unsure whether you’re on track for retirement, now may be a good time to get a second opinion from a professional.
Read more: 5 Signs You Need a Financial Second Opinion.
Why Working With a Retirement Planning Specialist Matters
Your financial landscape changes when you stop working. Your cash flow shifts from saving to withdrawing. Government benefits like CPP and OAS need to be coordinated with the rest of your income. Additionally, investment decisions take on a new importance, as they begin to support your lifestyle rather than simply growing your wealth. A general financial advisor may not have experience with the specific challenges of decumulation.
Here are a few examples of where specialized retirement advice makes a difference:
RRIF withdrawals without a tax strategy: A general advisor may suggest waiting until age 72 to start withdrawals. But that can lead to large, taxable withdrawals later. A retirement specialist may recommend earlier, controlled withdrawals to smooth your tax bill and reduce future risk.
Overlooking sequence of return risk: Taking withdrawals during a market downturn early in retirement can have long-lasting effects. A specialist helps build safeguards, like cash reserves or flexible withdrawal plans, to reduce this risk.
Not managing longevity risk: Planning based on average life expectancy may leave you unprepared if you live longer than expected. A retirement planner models scenarios where you outlive expectations and adjusts your income and spending plan to ensure your savings last.
Mistakes in these areas can be costly and difficult to reverse. A retirement specialist brings the experience and tools needed to help you avoid common pitfalls.
For more on this, see 5 Reasons Your Retirement Plan May Not Succeed.
When Should You Talk to a Financial Planner?
Most retirement financial planners work with people in or near retirement. That often means people in their 50s or 60s, though some start planning in their 40s. Retirement planning is not just for the wealthy. Anyone who wants a clear plan for how to stop working and live off their savings can benefit.
The best time to speak with a retirement planner is about five years before you plan to retire. That gives you enough time to make meaningful changes to your savings strategy, investment approach, and tax planning. It also allows time to adjust your spending habits and build a relationship with your advisor before making major financial decisions.
That said, it’s never too late to get help. Even if you’ve already retired, a planner can still help you improve your withdrawal strategy, reduce taxes, and better align your income with your goals.
How Do I Find the Right Retirement Advisor?
Finding the right retirement advisor can make a big difference in how prepared you feel about your future.
Here are a few things to look for:
1. Focus on retirement planning
Choose someone who regularly works with clients who are approaching or already in retirement. They should understand income planning, government benefits, taxes, and withdrawal strategies.
2. Professional credentials
Look for one of the following designations:
Certified Financial Planner (CFP®),
Qualified Associate Financial Planner (QAFP®),
Registered Financial Planner (R.F.P.®).
These show the advisor has formal financial planning training and follows professional standards.
3. Clear, transparent compensation
It’s also important to understand how your advisor gets paid. Some earn commissions from selling financial products, which can create conflicts of interest. A fee-for-service or advice-only advisor is paid directly for their expertise, which helps ensure the advice is unbiased and tailored to your needs.
Many financial planners now work with clients virtually. This can make it easier to find someone who fits your needs, even if they’re not in your city.
A good place to start your search is with the Financial Planning Association of Canada (FPAC). They maintain a searchable directory of members. All advisors who join FPAC, including myself, have pledged to act as a fiduciary and put the needs of clients first.
Choosing the right advisor takes time, but it’s worth it to have a partner who can help you make informed decisions and feel confident about your retirement.
What Should I Ask Before Hiring a Retirement Planner?
Before committing to an advisor, it’s a good idea to ask a few key questions. Here are some questions to help you make an informed decision:
What services do you provide? Some advisors focus only on investments, while others provide full financial planning. If you’re retiring soon, look for someone who can help with income planning, tax strategies, government benefits, and spending decisions.
What are your qualifications? Ask about their education, the financial planning designations they've earned, and how long they’ve worked in financial planning.
How do you get paid? Advisors are paid in different ways. Some charge flat or hourly fees, while others are paid through commissions on the products they recommend. Understanding how they earn money can help you see whether their advice is likely to be unbiased.
What are my all-in costs? Get a full picture of what you’ll pay, including planning fees, investment management fees, and product costs, if any.
What is your process? A clear process can help you know what to expect. Will there be one meeting or several? Will you get a written plan? How often do they check in or adjust the plan once it’s in place?
Are you a fiduciary? A fiduciary is required to put your interests first. Not all advisors in Canada follow this standard, so it’s worth asking. It can give you more confidence that the advice you’re getting is focused on your goals.
It’s crucial to understand how your financial advisor gets paid. As a kid, my family almost lost our house after the dot-com market crash in 2000. An advisor had recommended borrowing money to invest, which caused major problems when stock prices fell. The strategy earned the advisor a commission, but it exposed us to major risk. This experience made it clear to me how important transparency about compensation is.
Conclusion
Retirement comes with a long list of financial decisions. These choices can affect how much income you have, how much tax you pay, and how long your savings will last.
A retirement-focused financial planner can help you understand your options, avoid common risks, and build a plan that supports your lifestyle. Whether you are planning to retire in a few years or are already retired, the right advice can make a meaningful difference.
If you're feeling uncertain, it may be time to speak with someone who understands this stage and can help you move forward with more confidence.
