In the coming years, there will be an increasing need for personal financial planners in the United States. This is partially driven by the big surge of Baby Boomers about to leave the workforce and join the golf course. There are also other factors that will bring an increased demand for personal financial planners in the coming years, such as foreign investors. Just to clarify, personal financial planners are not stock brokers. A financial planner might be hired on by a bank, a brokerage, a non-profit, or work independently, amongst other possibilities, to help clients figure out what the best course of action is to reach their financial goals. These goals may include retirement, which the Baby Boomers will drive, tax planning, or simply long-term savings. Whatever the case may be, personal financial planners are increasingly in demand.
Baby Boomer Retirement
Starting off with the Baby Boomer retirement, personal financial planners have and will continue to play an important role during the retirement phase of this generation. At first, the demand will be for financial planners to help make the transition from labor to retirement. As time passes, financial planners will be needed to help make the most of nest eggs. And finally, for those Baby Boomers with more than enough assets, the transfer of estates will be of major concern. These different phases will require a great deal of specialized knowledge, which personal financial planners will provide to their clients.
During the transition to retirement, there will be many Boomers who will have more than enough assets to carry them through their retirement. Some retirees, however, may need assistance in planning for their retirement with the bare minimum for their needs. For some, it might be adviseable to forego retirement another couple of years to help fend off the drain of capital. Something as deceptively simple as deciding when to retire creates the need for a trained consultant to help with the decision.
Once the Baby Boomers retire, there will be a need to determine what to do with any excess cash that their retirement savings kick out. For many, every dollar will count; but for some, there will be more savings than time or inclination to spend it. With the government requirement to make systematic withdrawals from their capital, many retirees will have to deal with the tax implications. There are tax implications simply from withdrawing money; there are also implications to saving some of that liberated money as interest income is taxable.
Finally, for those retirees who want to find out the best possible way to transfer their assets to their families with the least taxable impact, financial planners will undoubtedly play a major role. There are any number of ways to transfer assets to your family and they all have some sort of restrictions. The whole idea behind this is to avoid the strife of a contested will.
Foreign Investors
Foreign investors are another group who are driving up the demand for financial planners. There are many foreign business people who have excess cash and little faith in their own country’s financial markets. Consequently, they are bringing their money to the United States to invest in our financial market. We are not talking about the average Joe from Mexico or other Latin American countries; we are talking about the top 1% of earners in those countries. These are the people who buy million dollar homes for cash. We can modify our message in their case by stating that there is an increased need for bilingual financial planners.
With the coming market uncertainty caused by millions of Baby Boomer retirees liberating billions of dollars of capital from their retirement savings accounts every month, the average worker will not have time to read about and analyze what is happening in the financial markets. What will be safe investments? We have enough trouble discriminating between good and bad investments in a good market. The coming uncertainty is ironically certain to make it more difficult to make such distinctions. Whatever the case, you should either be or hire a personal financial planner in the coming years.
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