After you retire, do you still need financial planning? And can you afford it?

The answer to the first question is clearly “yes.” The answer to the second is “It depends.” At times it’s true that a financial planner becomes unaffordable in retirement. This is especially likely to be true if you have under $100,000 in retirement savings, you don’t own real estate other than your home, and your primary income is Social Security.

Ironically, if you have a fee-only financial planner who is your advocate, chances are when you retire and no longer can afford them that they will tell you to fire them before you do. I’ve done this with several clients. If you aren’t sure you can afford continued financial planning, the best thing to do is raise the question with your planner. As a fiduciary, they are obliged to put your interests first even to the point of recommending their own firing.

Yet even when their financial plans can fully fund ongoing advice and support, some retirees succumb to a fear-based money script that ongoing advice is too expensive. They make an emotional decision that they can’t afford financial planning once they no longer have earned income. Cutting this particular expense is especially ironic, considering that many advisors will include the cost of ongoing investment and financial planning advice in their retirement income projections.

In many ways, the transition from employment to retirement is a time when financial planning can be most valuable. Going from accumulating money to consuming it requires a lot of critical financial decisions in your tax planning, income planning, estate planning, health care, investments, and Social Security. In addition to the financial complexities, most of these decisions have a large emotional component which presents challenges that are hard to see and resolve without professional guidance.

Like all professional services, financial guidance isn’t free. You can elect to do it yourself after you retire. You can also end up costing yourself far more in financial missteps than you save in planning fees. The intangible benefits that a planner provides can save you from making costly mistakes.

It’s a myth that finances get easier in retirement. In many ways they become more complicated. It’s all too easy for anyone to make the wrong financial decisions when going it alone. As we age, the possibility of declining cognitive abilities puts us even more at risk for financial mistakes. Like planning for retirement, planning in retirement is a dynamic process that never ends.

Retirement is similar to traveling to a foreign country that you’ve never visited. It takes a lot of time, research, and planning to prepare for the journey. Once you reach your destination, you’re more likely to get the most out of the experience if you have a guide. Someone who knows the landscape, the language, the places to visit, and the places to avoid can be an invaluable resource.

It would make no sense to invest $20,000 into a jungle safari, only to decide on the day you enter the jungle that you need to fire your guide because you can’t afford their $1,000 fee. While you might “save” that $1,000, you may end up spending thousands more and missing out on many of the trip’s most memorable experiences because of your incomplete knowledge.

Retirement is one of the most significant life transitions you will go through. It impacts every aspect of your well-being: emotional, physical, and financial. Having a trusted guide to help negotiate the overwhelming number of details that need to be dealt with can be essential. There is great value in knowing a trusted financial advisor has your back.

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