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Enhance Your Retirement Savings with a Financial Advisor

A Financial Advisor Will Boost Your Retirement Savings

Working with a financial expert can kickstart your savings through avenues you don’t even know. A financial advisor can help you identify ways to increase your retirement readiness without sacrificing your current standard of living through optimized tax-efficient investments.

Despite advisors offering a leg up, approximately 40% of workers said they didn’t know who they could go to for financial or retirement advice, and just one-third of workers and retirees work with a professional financial advisor according to the Employee Benefit Research Institute. Here are all the ways your retirement savings can benefit from the help of a financial advisor.

5 Ways Financial Advisors Can Affect Retirement Savings

To put it simply, a financial advisor is a professional who provides clients with financial advice. There are many types of financial advisors, but some of the most commonly used for retirement planning are certified financial planners (CFPs), chartered financial analysts (CFAs), and chartered financial consultants (ChFC). Areas of expertise and costs vary by type of advisor.

Financial advisors focus on retirement planning work with their clients to create long-term goals and outline what steps they need to take to meet those goals. As a result, financial advisors can benefit your retirement savings in the following ways.

1. Maximizing Tax Efficiency

Over time, your income and investments will—hopefully—grow. You’ll owe taxes on the profits from your investments, known as capital gains taxes, when you sell investments or assets. You can also benefit from making certain types of investments now that can reduce your taxable income. A good financial advisor or certified public accountant (CPA) will recommend tax optimization strategies to minimize your tax burden.

For example, a financial advisor may recommend one or more of the following strategies based on your income and tax bracket:

  • Tax-advantaged accounts: Your financial advisor will help identify tax-advantaged accounts you can use, such as health savings accounts (HSAs) that allow you to contribute money from a pre-tax basis and grow the earnings tax-free.
  • Backdoor Roth IRA: In some cases, an advisor may recommend converting a traditional IRA to a Roth IRA; you’ll pay taxes on the converted amount, but your future withdrawals in retirement will be tax-free.
  • Maximizing tax deductions: A financial advisor or CPA can ensure you’re claiming all of the tax deductions and credits you’re eligible for to minimize your tax bill.

It’s hard to overstate how much of a difference proper tax planning can make in your eventual retirement balance. A financial advisor can help you identify which accounts are available to you and determine how to prioritize your investing in each. High earning years may be better for contributing pre-tax dollars, while low earning years may be the time to contribute to Roth accounts and complete Roth conversions. A financial advisor will be able to tell you how much to contribute to each and when.

2. Asset Allocation

As an investor, deciding what types of investments to invest in and what percentage of your portfolio should be invested in each asset class—such as stocks, bonds, and cash or cash-like assets—can be one of the most difficult and important decisions you can make.

A financial advisor will review your current financial situation and develop a portfolio based on your goals, age, current savings, monthly contributions, and risk tolerance.

For example, the asset allocation for someone with decades until retirement may be 80% invested in stocks and 20% in bonds to take advantage of market growth over the long term. But someone closer to retirement age typically cannot take on so much risk, so their focus may be on preserving their money with modest gains. For those investors, their portfolios may be 85% bonds and only 15% stocks.

3. Portfolio Rebalancing

As you save and invest for retirement, your portfolio’s asset allocation can shift over time as market conditions change and the value of your investments fluctuate. You need to rebalance your portfolio to ensure it’s aligned with the right level of risk to maximize returns.

With portfolio rebalancing, your financial advisor will analyze your portfolio and make adjustments to bring it back in line with your target asset allocation. This typically involves selling some investments and purchasing others to restore the desired balance.

By regularly monitoring and rebalancing your portfolio, a financial advisor can help you stay on track and ensure your investments are working towards your retirement goals.

Related Facts

  • According to a study by Vanguard, working with a financial advisor can lead to an average annual return of 3% per year compared to investors who do not seek professional advice.
  • A survey by Northwestern Mutual found that 66% of people who work with a financial advisor feel financially secure, compared to only 30% of those who don’t.
  • According to a report by Morningstar, individuals who receive financial advice have, on average, 1.59 times more in retirement savings than those who don’t.

Key Takeaway

Working with a financial advisor can significantly impact your retirement savings. They can help maximize tax efficiency, create an appropriate asset allocation, and regularly rebalance your portfolio to ensure you’re on track to meet your retirement goals. The guidance and expertise of a financial advisor can make a real difference in your long-term financial security.


If you want to boost your retirement savings, seeking the help of a financial advisor is a smart move. They have the knowledge and experience to optimize your investments, minimize your tax burden, and create a sustainable retirement plan. Don’t miss out on the potential benefits that a financial advisor can provide.

Denk Liu
Denk Liu
Denk Liu is an honest person who always tells it like it is. He's also very objective, seeing the situation for what it is and not getting wrapped up in emotion. He's a regular guy - witty and smart but not pretentious. He loves playing video games and watching action movies in his free time.

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