Before we do the in-depth discussion about a Certified Retirement counselor, first, let’s give you a brief intro to retirement and retirement planning.
Retirement is a period of one’s life when he or she decides to stop work for money. Or they decide to end their carrier in the respective field. Although they may still choose to do some minor work to put food on the table, they have officially left the workforce behind.
An average person retires at an age of 62 years and the average life expectancy is around 75 years. In these one or two decades, typically a person will not earn any active income. Depending on the financial condition, one can either spend these decades with joy and happiness or just waiting for time to pass. In this period, some wish to travel, some wish fulfill their hobbies, or some wish to do social work. Whatever they do, they have to be in a stable financial condition, and for that retirement planning is important.
The process of setting goals and desires for this retirement and taking action to achieve these goals is called Retirement planning. Simply put, retirement planning is ensuring that when you retire and stop earning, you have a passive income source to make ends meet.
Having a retirement plan is not only necessary for achieving goals but also to pay for medical emergencies and outpacing inflation. According to research conducted in the U.S., an average couple in their retirement spends six figures of money just paying medical bills. Yes, this was shocking to me also!
To have an effective retirement strategy your current age and expected retirement age is of the essence. The younger you start focusing on retirement plans, the better. These retirement plans and strategies are created and designed by a financial advisor, or particularly a retirement counselor.
Even though the words retirement counselor and financial advisor sound similar, the former word is a subset of the latter one. At some point in time, they were also general financial advisors, but they decided to pursue the field of retirement planning.
Financial advisors who wish to specialize in the field of retirement planning can pursue numerous certifications like Certified Retirement Financial Advisor (CRFA) and Certified Retirement Counselor (CRC).
In the article, we are going to specifically focus on the Certified Retirement Counselor (CRC) certification.
Certified Retirement Counselor (CRC) is a certification offered by the InFRE to financial advisors to enhance their knowledge in the areas of retirement. The InFRE stands for International Foundation of Retirement Education and is a non-profit organization founded in the year 1997.
What does a CRC certified advisor offer?
When you see the word “CRC” at the end of a name, it is there to designate that he or she possesses in-depth knowledge in all the subjects related to retirement. Having a CRC at the end of an advisor’s title indicates his or her expertise and reputation in the field of retirement.
If you are a financial advisor looking to specialize in the field of retirement planning, earning this certification will add a plus to your reputation and knowledge.
Benefits of having a CRC
There are numerous certifications available to advisors to specialize in the field of retirement, but what makes CRC a top-class certification? Take a look at few benefits of having a CRC designation.
1. CRC is an independently accredited program by the National Commission for Certifying Agency (NCCA) which is itself an accreditation body of the ICE (Institute of Credentialing Excellence).
2. CRC program entails an in-depth mastery in numerous areas of retirement planning.
3. CRC is a program updated by professionals regularly with relevant knowledge.
4. CRC is an ongoing certification, candidates have to meet specific criteria to keep renewing their certification annually.
5. Advisors who pursue the CRC program commit their adherence to a code of ethics. When candidates renew their certification annually, they have to submit a statement that proves their adherence to the code of ethics.
Who can pursue a Certified Retirement Counselor (CRC) program? And how?
Pursuing a CRC certification requires a balance of both: education and work experience. Firstly, candidates pursuing CRC certification are required to have a bachelor’s degree in any subject from an accredited college or university. Secondly, candidates must have work experience of at least two years in the field of retirement within the past 5 years.
The difficulty of this certification depends on the existing knowledge of an advisor. Advisors who already have knowledge and experience in the retirement field may pass the exam with ease. In contrast, an advisor with lesser knowledge may need to spend a ton of time and effort to pass. That’s why this certification is typically for professionals with existing knowledge and skill set.
Aside from existing education, pursuing a CRC certification involves passing an exam and adherence to the code of ethics by InFRE. This exam covers areas like the basics of investing, retirement planning, and wealth management. Candidates can study on their own, or they can buy study materials from InFRE. Study materials are readily available on the official website of InFRE
CRC is an ongoing certification, to keep using CRC in the title, advisors have to renew the certification annually. Renewing the certification entails continuing education and a renewal fee. Although when you don’t renew your certification you still have the knowledge and expertise, you are not allowed to add CRC to your name.
Getting a Retirement Counselor Guide
Getting an ideal retirement counselor can be a lengthy process and the requirement varies from person to person. Now, we will walk you through a step by step guide for hiring a retirement counselor.
Step 1. Know Your Goals and Desires
Before you search for a retirement counselor, it is a good idea to know your goals and desires. Make a comprehensive list of things you wish to do in your retirement or you wish to have. Decide your risk tolerance capabilities, some people can tolerate more risk if there is a prospect of higher returns. In contrast, some people wish minimum risks even if the prospect of returns are higher.
If you know you will require a large sum of money for something important like marriage or university fees, list those expenses also. These will help the counselor in making a retirement plan.
Step 2. Make a Budget
Determine how much you want to invest in your retirement and also how much you are willing to pay a counselor. The thumb rule for retirement is to have at least 60 percent of your previous income as a source. Based on this, find how much you can invest to achieve the goal of 60%.
Apart from investing budget, budgeting for the counselor is equally important. If you have assets valuing in six figures or more, be willing to pay 1% of those per annum. If you find a good retirement counselor, do not hesitate to pay him some money. Research how much they charge typically and make a suitable budget.
Step 3. Look for a counselor with a fee-only compensation structure
When you hire a retirement counselor, make sure to understand how they charge. If their compensation structure is commission-based, try to avoid them. Commission-based structure
results in more conflicts because when he recommends a product, you will not know whether that product is beneficial for you or he just wants to make some commission.
Although if you find a counselor whose compensation structure is a mix of both, you can choose to hire him if he is suitable.
Step 4. Consider a recommend counselor
If you are struggling to trust a retirement counselor, you are not alone. Ask, family members and friends if they know any trustable counselor, and if they recommend you one, give that counselor a priority.
Step 5. Interview before hiring
Before hiring a retirement counselor, select a few and interview them. Ask them for their credentials and experience. Look for retirement counselors with certifications like CRC or CRFA. Focus on their skills and how they excel in them. When you interview a counselor ask them if they had a client similar to you and how they planned their retirement.
Step 6. Verify their credentials
Most certifications and licenses can easily be verified. Just go to the official website of shown certification, you will most probably find a column there to search for advisors who truly hold their certificate. This same process applies to licenses as well.
Step 7. Beware of Potential Fraud
Risking your money in the hands of a fraud sounds downright depressing, right? Don’t be, you can avoid them if you are cautious.
While interviewing them ask them for credentials and verify them. If you find anything suspicious, try to avoid them at all costs. You can not afford to risk your entire retirement.
Step 8. Find and hire a retirement counselor
You can narrow down your search by going online. Use online searches to narrow down counselors in your ZIP code who meet your needs.
Once you hire a retirement counselor, sit and discuss everything with him. Don’t shy to share anything with him or her. Share your every desire or goal. If you have a big debt to pay, tell them that as well. They can help you manage that and plan your retirement accordingly. Every detail you share with them will ultimately help them create a better retirement plan for you.
Retirement Counselor for Army Veteran
After serving the nation for so many years, veterans deserve to have a comfortable retirement. Their transition from military to civilian life is drastic and they deserve a good one.
Being a veteran you get a lot of benefits, to get those benefits you have to apply for the Veteran ID card. Based on the disability or yeas you served, you get access to benefit like VA health care, VA home loan, or veteran discounts.
If you have a debt or mortgage to pay, aim to get rid of that as quickly as possible and start shifting your focus on other retirement areas. Although being an army veteran you have to worry more about your retirement, the guide to finding a retirement counselor remains the same. Just add one more step in your hiring process. Look for retirement counselors who had veterans as clients.
When you were in the army, you must have made some good friends and they are likely to through the same process, and if they find a good retirement counselor, you can find as well. Contact your army friends and ask them if they know a good retirement counselor.
All in one Financial Advisor or Consultant company
Apart from your retirement planning, if you need help with other financial aspects of your life you can consider hiring an All-in-one financial advisor or a consultant company. Typically, Financial advisors either work independently or under a firm or company. The difference in working under a firm is that someone is accountable for advisors’ actions. When paying an independent financial advisor, you will likely pay according to their compensation structure, but a firm has a fixed compensation structure and all advisors are bound by that.
All-in-one financial advisors and consultant firms help people in the following tasks.
– If you want someone to make a starter portfolio for you, a financial advisor can do so. He or she can recommend the best investments as per your needs. These investments can be stocks, bonds, real estate, or even precious metals.
• Tax management
– The advantage of hiring a financial advisor over a specialized retirement counselor is that he or she can help you with your taxes. Taxes are inevitable and sometimes they can be overwhelming, a financial advisor can help you in managing them.
– Financial advisors can also act as financial coaches, they can help you with your saving strategies.
– The job of a financial advisor is not only to advise but also to educate you on various topics. He or she can explain the complex working of stocks and investments in simple words.