Three most common questions financial advisors face

The Means Report: Three Common Questions Financial Advisors Face graphic
The Means Report: Three Common Questions Financial Advisors Face graphic

Augusta, GA (WJBF) — There are a multitude of questions that clients have for their financial advisors — from investing to debt to retirement, but there are three frequent questions that come up. Will Caywood, a financial advisor with the Fehrman Investment Group, explains what they are, and what factors he takes into consideration.

Will Caywood — Life’s long and winding road generally includes plenty of side trips along the way to a comfortable retirement. There may be homes to buy, children to raise and educate, careers to pursue and a vacation here or there. Our list of needs and wants sometimes seems to never end. Of course, all these objectives have something in common. They take money. And while it can feel overwhelming, breaking everything down into manageable pieces will give you a much better idea of how to deal with the inevitable trade-offs and achieve your personal goals.

As a financial advisor, three of the biggest questions we work with clients on are: Number One, should I save for college or save for retirement? Number Two, should I pay down debt or build up my savings? And Number Three, when can I retire, and will I run out of money?

The saving for college versus saving for retirement is always a difficult decision. There’s one school of thought that says that since your children will be going to college before you are going to retire, you should fund that goal as much as possible first. The other way to look at this is that each of us plan to retire one day and not every one of our kids will go to college one day, so you should fund retirement first and then put money in college account after that. Each person’s situation is unique but in general I would recommend funding your retirement first since there are so many other ways to pay for college, like scholarships, grants, loans and even grandparents. These options aren’t there for you when you retire.

Paying down debt versus building up your savings is another decision that we work with clients on. It’s a good problem to have because it means that you have some extra money to apply to one of the two options. Almost always I recommend paying down debt before building up savings or investing because the interest rate you’re paying on the debt is usually higher than the amount you’ll be earning elsewhere. The interest on debt stretches people out financially and stresses people out emotionally. Paying down debt and building your savings up is doable but it takes commitment and discipline.

The retirement questions are the ones that we get the most and is what our business specializes in. There are so many variables that go into answering these questions correctly that having an advisor is essential for most people. People should look at a retirement date versus a retirement lifestyle. Just because you can retire financially doesn’t mean that you should. Many people have the means to retire and decide to and then later go back into the workforce. Health benefits should be a major concern for people who decide to retire, but aren’t age 65 yet, when Medicare is available. Many people later in their careers can enjoy a retirement-like lifestyle while they are still working. You’ll be generating more income during your peak earning years so you should be able to add in travel and other activities before officially retiring.

These three decisions are just a piece of what we help clients with. Feel free to call our office, if we can help you or your family with your financial decisions.

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Brad Means

The Means Report first aired in January of 2009 offering coverage that you cannot get from a daily newscast. Forget about quick soundbytes -- we deliver an in-depth perspective on the biggest stories. If they are making news on the local or national level, you will find them on the set of The Means Report. Hosted by WJBF NewsChannel 6 anchor, Brad Means, The Means Report covers the topics impacting your life, your town, your state, and your future.