Just because you have recently graduated from college or are early in your career doesn’t mean that you shouldn’t be thinking about your financial future or that you can’t seek help in answering questions you may have. This is the exact time you should be asking questions. First, from a saving for your retirement perspective, the younger you are when you start planning and saving for your retirement the better your chances of having a financially independent retirement age.
But, if you are like many young workers or graduates you feel as if you are unable to save toward many of your life goals. You may be like the many other recent graduates who have higher levels of student loan debt, lower levels of wealth and personal income than any other generation at the same stage in life according to The Pew Research Center. Depending on the type of student loans you have federal (subsidized/ unsubsidized) loans or private loans your repayment options will vary. That only means you need some help to review your student loans to see if you could benefit from refinancing them or help you figure out a plan to begin paying off your loans.
If you are dead set on going it alone or want to see what your loan payments might look like, here is a link where you can estimate your own loan payment and play with the numbers: https://studentloans.gov/myDirectLoan/repaymentEstimator.action
Additionally, you may need some help understanding and comparing potential employer’s benefit packages when evaluating two offers or help with questions about your current employer’s benefits package and investment selections.
These are all perfectly normal questions for any worker to have regardless of age. They are also perfectly appropriate questions to seek financial guidance with.
The first thing you need to know is where to look to find the help you need. Many large companies care more about the amount of money you can place with them. This is because they make a profit on your investment with them. You need a financial planner who can help answer your questions and educate you on financial planning basics. You do not need a broker, you’re not investing (at least not yet)!
There are many professional financial advisors out there calling themselves Financial Planners, many professional titles, and designations, and there are Certified Financial Planners™ or CFP® for short. What is the difference? Good question. While many advisors who called themselves financial planners are good at what they do and are trustworthy, just like within any industry, some aren’t. When in doubt, my suggestion is to go with a Certified Financial Planner™. The planner that is certified through the CFP Board will have had to meet several criteria to obtain certification, such as, a minimum amount of time in the industry, meet and continue to certify to certain ethical standards, passed the CFP® Board’s Exam, and keep current on continuing education requirements. From personal experience, the CFP® Board’s exam is not an easy exam to pass.
Second thing you need to know is how much should you pay and what should you expect to receive. Fee-only or fee-based financial planners can charge either a flat fee, retainer fees, or fees charged as a percentage on the amount of assets they manage or advise on. A flat fee means you pay a stated fee and receive the advice/ plan in return. Retainer fees are typically used if there is to be an on-going planning relationship and percentage fees are usually used when the planner will also be working with the client to help them implement the plan and manage their investments.
If you have student debt, need help creating a budget and reviewing your benefits, or just started working for a company you more than likely will not be seeking investment advice. Meaning a percentage fee probably isn’t for you and if you are not planning to continue a planning or advisory relationship then the retainer fee approach probably isn’t either.
Financial Planners who charge a percentage fee typically charge 1.25% or less. A flat fee for a comprehensive financial plan will typically run between $2,000 and $ 5,000. However, if you need a smaller plan to look at budgeting, loan repayment, or help to select benefits you should expect to pay a much smaller flat planning fee.
However, there are many other fees for planning structures offered. Just make sure you understand the type of fee, how much is the fee charged, and what you should expect to receive for that fee. My best suggestion is to find 2-3 financial planners and interview each one to make sure you are comfortable working with them. If you are interested in locating a Certified Financial Planner™ close to you, http://www.letsmakeaplan.org/choose-a-cfp-professional/find-a-cfp-professionalwill help you to search planning professionals who hold that designation.
The third thing to know is… get started! The sooner you make your finances and financial future a priority the better off you will be in the long run. If you have financial questions and are needing help, don’t be concerned that you wouldn’t qualify to receive professional advice or can’t afford to pay for help. Seeking help in making smart financial decisions will help you to avoid costly mistakes.
When Castle Wealth Advisors, LLC was started it was important to create an approachable company that used an ethical and solid investing approach to answer individual’s and business owner ’s financial questions regardless of age, gender, race, or net worth. In fact, it was so important, it became the company’s mission!!
We typically charge a flat fee of $800 for smaller topic focused plans (included is review of student loan debt, budget planning assistance, and employer benefits review). If you don’t have a trusted advisor, you’re unsure or have questions about your investments/ financial life, and are located in California or Alabama, Castle Wealth Advisors, LLC would be happy to discuss your situation and offer guidance. You may schedule a complimentary initial conference call to discuss your particular situation and receive a personalized plan pricing quote. Check us out at Castle Wealth Advisors, LLC to learn more about services we offer for young workers/investors or to understanding the difference in working with a Certified Financial Planner™.
This information is general in nature and may be subject to change. Financial professionals and other representatives are not authorized to give legal, tax or accounting advice. Applicable laws and regulations are complex and subject to change. Any tax statements in this material are not intended to suggest the avoidance of U.S. federal, state or local tax penalties. For advice concerning your individual circumstances, consult a professional attorney, tax advisor or accountant.
Securities offered through NMS Capital Advisors, LLC, Member FINRA/SIPC. Advisory products and services offered through Castle Wealth Advisors, LLC, a Registered Investment Advisor. NMS Capital Advisors, LLC and Castle Wealth Advisors, LLC are unaffiliated entities.