As the name suggests, a financial advisor is someone who advises you on what to do with your finances.  It is a professional position and they are utilized through all walks of life, by all sorts of different people.  Just about anyone can benefit from using a financial advisor, but the real question is, when is the best time to hire one?

The Real Answer
The real answer to the ‘best time’ question as it pertains to a financial advisor is as soon as possible.  Not everyone is in the position to hire a financial advisor, but it is never really too early to get started.  Basically, the sooner you’re able to start the process, the better things will be as you get older and continue on through life.  If you have an income and you have bills and debts, you will benefit from a financial advisor. 

For most people, whenever retirement starts to get on the radar is a good time to bring in a financial advisor.  When you can see the finish line on the horizon, you will want to start making plans and organizing your money so the transition is a smooth one.  It’s tough when you stop getting a pay cheque and aren’t prepared and an advisor will help sort it all out. 

Death of a Spouse
When a spouse passes away, the financial needs of the surviving spouse can change and become quite challenging.  Many people who have lost a spouse end up looking to a financial advisor for help and to get back on track.

Receiving an inheritance often comes at a time of loss, which can alter the decision-making process, but even if it was from someone you weren’t close to, getting a large sum of money out of the blue can lead to problems.  Many people who have received inheritances just end up squandering the money, so a financial advisor is usually the way to go. 

Selling a Business
When you decide to sell a business, there are several different professionals that need to be involved in the process.  These include lawyers, accountants and if you’re smart, a financial advisor.  An advisor can help you to organize any profit you might have from the sale and create a solid plan going forward.  Not everyone who sells a business considers using a financial advisor, but since there is money changing hands and often many loose ends to tie up, there are benefits to doing so.

Financial planning is one of those activities that you can technically do yourself, but would probably be much better off if an expert were in control.  A financial planner can take your portfolio to the next level, or for most people, create one in the first place. 

A financial planner will help you organize, plan, invest, evaluate and allocate to enhance your financial life.  And with such an important job at hand, it’s wise to ask your planner some equally important questions before you sign on. 

How to Choose
When choosing a financial planner, make sure you consider things like his or her education and practical experience, fees, method of payment and what precise services they provide.  Ask if you can speak to some current and former clients so you can get a sense of the general satisfaction level and expertise in financial planning. 

Once you have decide on a financial planner, here are some questions you’ll want to ask. 

When Can I Retire?
Most people want to know what kind of retirement plan they can expect, and more specifically when they can wrap up their work life and start taking it easy.  Your planner should include this as part of an overall plan. 

How Can I Save For Kid’s College?
If you have children, it’s better to start saving for college or university sooner rather than later.  Make sure this important question is part of the equation during your first strategy session. 

How Should I Invest?
Quite often, financial planning has as much to do with investing as it does anything else, so find out what kind of investments he is planning, and how much you are supposed to dedicate to each one. 

What Type of Insurance Should I Have?
Your financial planner will be able to advise you on the proper types of insurance to have to protect your various investments and financial strategies.  Without the right kind of insurance you run the risk of losing everything you’ve gained if something happens and your money is affected. 

What Are Some Sound Tax Strategies?
Making sound investments means making extra money which means paying more in taxes.  Your planner should direct you toward investments that will maximize your return while minimizing the taxes you have to pay.  Financial planning means being clever and playing the tax game sometimes, too.

What’s Your Overall Plan for Me?
Along with all the details, you’ll want to know what the broad, overall picture looks like as far as your finances go.  It’s nice to be able to have an overall plan and guide to consult from time to time as you continue on with the process.

 If you are trying to save money on your tax bill this year, you should look into tax-free savings accounts. Although these accounts don't allow to completely forego paying your taxes, you can at least defer them until a later date. In the meantime, you are free to use the money as you see fit.

Your Money Can Accrue Interest Tax-Free
The best reason to use a tax-free savings account such as an IRA or 401k is that the money will accrue interest that is not subject to tax until you make a withdrawal. This gives you more money to invest as you see fit until you retire without being burdened with giving some of it to the government. Your financial advisor will be able to help you decide which account will work best for you.

Lower Your Tax Bill For The Previous Year
The nice thing about most savings accounts is that you don't have to actually put the money in them in the year for which you are filing your taxes. For example, you can put money into your IRA up until the date that you file in 2013. However, your contribution will still lower your taxable income for the 2012 tax year. For most people, their tax returns are due in April or October if they file for an extension. This allows you to take advantage of a tax break even if you don't have the money in your account when the current year ends.

Invest In The Things That Interest You
Although most savings accounts limit you to investing in stocks and bonds, some savings accounts will allow you to invest in whatever you like. Using a self-directed account will give you the opportunity to invest in real estate, gold, and anything else that you think will make you money. Additionally, you can avoid real estate taxes if you decide to flip your properties and put the profits back into your account. Your financial advisor will be able to tell you how to make that happen.

Start Your Own Business With Your Tax-Free Savings Account
If you have ever wanted to start a business or help a friend or family member start a business, you can use the funds in your account to start up your business. However, you may have to repay whatever funds you take out of your account. If you are self-employed, you gain two advantages from this type of move. First, you can withdraw the funds without having to pay a penalty. Secondly, you can take the money out your account without having to get approval for the loan. That typically does not happen for self-employed people when they go to the bank.

A tax-free savings account gives you a variety of different benefits. You can lower your tax bill, use the money to invest and you can invest the money without paying capital gains taxes until you actually withdraw the money. There is no reason why you shouldn't have at least of these accounts.

Living a comfortably in retirement is the dream of virtually all working Americans. In today's challenging economic environment, it is critical that people have a clear understanding of their desired retirement lifestyle. Based upon their retirement vision, retirees are then able to undertake the financial analysis necessary to ensure that their finances are adequate to support them throughout retirement. Here is a simple framework for thinking about the key issues retirees face:

Create Your Own Personal Retirement Vision
Everyone's vision of retirement nirvana is different, and thus there are numerous lifestyle decisions that retirees must address. Perhaps the most fundamental decision to be made is geographic location. Do we stay in our current location or relocate to another area? Some people dream of extensive traveling to exotic locales, while other folks are content to decompress from the working world and spend more time at home with friends and family. Retirees may use the freedom of retirement to focus more on existing hobbies, or possibly develop new ones. The personal enrichment found in volunteering is also a focus area for many retirees who previously never had the time to fully devote to helping others. Another retirement concern is the feeling of isolation that can occur after exiting the workforce. Social media and internet technology can be useful in helping people stay connected with friends and co workers after retirement.

Forecast Retirement Expenses
If the retiree has a clear vision of their retirement lifestyle, then analyzing future expenses is the next logical task. A spreadsheet outlining current expeditures by budget category should be constructed and compared against estimated spending in retirement. The good news is many items may show a lower monthly cost in retirement, including reductions in commuting expense, work lunches, and dry cleaning/work clothing. With the extra time available, retirees often find they are able to become more savvy shoppers, taking advantage of couponing, senior discounts, and coordinating errand trips to reduce transportation expenses. A significant percentage of retirees also choose to downsize their housing footprint, which can offer relief to the household budget in terms of mortgage expense and operational maintenance costs. Retirees need to be aware of budget items that may increase in retirement. Health care in particular can be an issue if the retiree is losing employer coverage and doesn't qualify yet for Medicare. Those who plan to travel extensively or take up new expensive hobbies, will need to adjust their budgets accordingly.

Retirement Income Analysis
Now that expenses in retirement have been carefully analyzed, the income side of the ledger needs to be scrutinized to ensure sufficient funds are available to live the desired lifestyle. The good news is most financial advisors estimate retirees can live on 70-75% of the pre retirement income. Social Security is an important piece of the puzzle but was only designed to be a supplement to the individual's savings. Clearly, the retiree will have to rely primarily on a combination of their personal savings, Individual Retirement Accounts (IRA's), and any defined benefit plan (pension) they may receive from their employer. Even though work is a four letter word, many retirees plan to work part time to supplement their incomes.

These simple steps of visualizing their ideal retirement, and analyzing the costs and income levels necessary to support their lifestyle, will give retirees the tools to successfully transition to the next phase of their lives.

No matter how old you are or how much you make, financial planning is something that you need to have in your life. Some people live well off of $50,000 a year and retire early, while others struggle to make ends meet and never come close to retirement. How can such large discrepancies exist between individuals and families who make roughly the same amount? The answer is that the people who live well and retire early have sound financial planning, while the others don't. Usually this planning comes from the advice of a financial planner. Let's take a look at how utilization of a financial planner can save a person time and money.

Financial planning can impact different areas of every person's life, but personal financial management might be the most important part of the planning process. A common practice that's taken by many people is to make minimum payments on things like credit cards and loans in order to save more in cash. While this makes sense when a person is just establishing an emergency fund, the fact is that any dollar that can be paid towards a debt and isn't will only increase a debt. That's because more interest is owed the longer a debt is prolonged. The best practice is to maximize debt payments in order to save money and free up cash later in life, but only a professional financial advisor can make this judgment. A financial advisor will be able to take the hard figures of income and expenses and find out what plan makes sense.

Aside from this, there are other questions that come up in the financial planning process. Some of this even starts before a person turns twenty when they're faced with the decision of whether to go to college. With tuition being so high at many universities, the value of a college education has come into question in recent years. For this, people need to do their own individual research and determine whether the increased earnings that come as a result of having a college degree will justify the cost of attending. Similarly, when buying a home, individuals might seek the advice of an advisor to find out just how large of a mortgage they can afford to take on.

There are so many questions involved in the financial planning process that it might be overwhelming for one person. In truth, the financial planning isn't something that people will want to use a do-it-yourself approach for. The truth is, no matter how educated you are in the field of finance, the benefits of hiring a financial advisor will almost always outweigh the cost. A financial advisor will have a better understanding of things like projecting future investment market conditions and realistic budgeting. On top of this, they have experience.

Financial planning doesn't have to be daunting. With the right advice and discipline, you can live well and get what you want out of life with almost no regard to what level of income you're at. The key is to make a long-term plan and then stick to it.