When you contact someone, explain you need a start and don't come across as too green... you're just young, not clueless. It's your money.
That's good advice, Jeff.
Next question comes from Sara.
Actually, Stephanie, you should be congratulated for putting money into your 401(k), plus having an emergency fund, plus wanting to save more.
www.napfa.org will lead you to referrals in your state or local area
While we're on the topic of fee-only advisors. What separates them from other financial planners? Do all planners have to be certified?
Look for a few planners in your area and call them first to chat for a bit and see if you feel comfortable with them.
First off, tell them what kind of advice you're looking for and ask if they deal with clients like you.
Just be plain-spoken and tell them what you need to know and want to do. Each case is different, so a good planner--who is a counselor-- won't have a pre-conceived idea of something to sell you.
Jeff, anything else to add?
That's a key point: If the planner/adviser immediately tries to sell you something, that's a red flag.
Great, next question is from Freddy...I'm sure it's something many people wonder about.
You need to compare the planner's performance with you money to benchmarks, such as stock indexes and bond indexes. If the planner isn't at least matching the market performance, you need a new planner.
A planner's job isn't necessarily to make you money. It's to keep you from doing things that get you off track towards meeting your goals in life. If you're saying, the adviser picked the wrong funds, or was too conservative and kept you in cash when the stock market doubled, then you need to rethink the relationship and who is in charge and who is serving whom. Maybe you need a different sort of investment adviser altogether.
Here's a question from one of our Twitter followers, Megan.
There are 100 or more of these designations and they have massive overlap.
What are some of the most basic designations people might look for when searching for a financial professional? Are there any that are particularly important?
But some do refer to very specific functions. For example, a CPA is an accountant, a CFA has a specialty in investing, and a CFP offers general financial advice.
I'd say that the three I just mentioned are pretty basic and pretty important.
Our next question is about estate-planning.
I agree. Many of the lesser known ones do not require the same degree of study and training.
Do you have power of attorney for your parents?
I'm not an attorney, but I'd say it would be normal for the attorney to consult with your parents first. It would be up to them to decide how much to share with you.
Unless you have power of attorney or some other legal authority over them.
Ah, okay. Then unless they specifically wanted you in the meeting, the attorney is likely to advise he speak with your parents privately. I recently had a similar situation with my mother.
Next up, another tax question
Why haven't you filed? Too complicated or you just don't want to face it? :-)
You'll still probably need to file an extension, but if you owe taxes, you can avoid penalties