Retiring in 2025 looks different than it did even a few years ago. Contribution limits have shifted, required minimum distribution (RMD) rules have evolved, and the line between advisory and brokerage services is more clearly labeled for consumers.
Against that backdrop, many near-retirees ask a practical question: Should I hire a financial advisor before I retire?
Do You Need an Advisor? Why This Decision Matters
Deciding whether to work with a financial advisor before you retire is one of the most important choices you’ll make as you approach this new life stage. The decision isn’t just about investments — it’s about taxes, income security, health care planning, and your peace of mind over the next two to three decades.
On the positive side, a trusted financial advisor can help you create a tax-smart retirement income plan, keep you disciplined when markets are volatile, simplify complex regulations around Social Security and required minimum distributions, and hold you accountable to a strategy. Those benefits can add up to a smoother and more confident retirement journey.
But there are also downsides to consider. Advisory fees can compound over time, not every professional is legally required to act in your best interest, and some may add unnecessary complexity to your finances. Plus, handing over control of investment decisions can feel like a
big step if you prefer to stay hands-on.
Pros & Cons At A Glance
Pros
- Coordinated, tax-aware retirement income planning
- Behavioral coaching through volatile markets
- Expertise navigating complex rules (RMDs, Roths, Social Security timing) 4. Time savings and accountability
Cons
- The cost. Fees can add up over a long retirement.
- Quality varies; not every advisor is fiduciary all the time
- Potential for product or portfolio complexity you don’t need
- Loss of some DIY flexibility and control
Pros and Cons of Hiring a Financial Advisor [2025]
Below is a balanced, up-to-date look at the advantages and drawbacks of hiring a financial advisor.
This information will help you decide on the best approach for you, especially if you’re comparing do-it-yourself planning with working alongside a trusted financial advisor.
Pro: Tax-aware retirement income planning
The years spanning five before and five after retirement (the “retirement red zone”) are when smart decisions compound. A seasoned planner can coordinate withdrawals from taxable, tax-deferred, and Roth accounts to minimize lifetime taxes, not just taxes this year. That includes sequencing withdrawals to manage Medicare IRMAA exposure, capital gains, and the impact of RMDs once they start.
What’s new for 2025+:
- RMD age remains 73 today and rises to 75 in 2033, changing when mandatory withdrawals begin for many retirees. That extra runway can open opportunities for partial Roth conversions in your early 70s.
- Roth 401(k) dollars no longer require RMDs starting in 2024, aligning workplace Roths with Roth IRAs and giving you more flexibility to keep Roth money compounding.
A financial advisor who models multi-year tax scenarios can show you how today’s moves affect lifetime after-tax income, not just next April’s refund.
Pro: Coaching and personalized support
Once paychecks stop, portfolio swings feel different. Selling in a downturn can permanently impair a nest egg due to sequence-of-returns risk.
A good advisor serves as a circuit-breaker, helping you pre-commit to a withdrawal policy, choose an appropriate cash buffer, and rebalance methodically rather than emotionally. This “coaching alpha” isn’t easily captured in a spreadsheet but is one of the most cited reasons clients stay invested through rough patches.
Pro: Expert guidance when the rules keep changing
Between Secure Act updates and ongoing agency guidance, retirement policy doesn’t sit still. Advisors monitor developments such as contribution limits, catch-up rules, and distribution guidance so you don’t have to. For example:
- 2025 elective deferral limit: 401(k)/403(b)/most 457/TSP contributions rose to $23,500 (catch-up for age 50+ remains separate), affecting late-career savings strategy.
- Evolving catch-up rules for higher earners: Implementation details around Roth catch-ups continue to be clarified by regulators and trade guidance into 2025. If you’re a late-career worker still contributing, knowing what applies to you (and when) matters.
A pro can translate these changes into specific actions for your accounts and employer plan.
Pro: Time savings and accountability
Building and maintaining a retirement plan is a project, not a one-time purchase. Advisors set review cadences, run “what-if” scenarios, verify beneficiaries and estate documents, keep asset locations tax-smart, and make sure required distributions and tax estimates happen on time.
For many pre-retirees, offloading this ongoing workload is worth real money and peace of mind. Con: High costs
Advisors aren’t free, and fees compound over decades just as investment returns do. Depending on the model:
- AUM (assets under management) fees are often quoted around 1% for a typical relationship, though pricing can tier down with larger portfolios.
- Flat-fee or subscription planning can run a few thousand dollars per year, with recent surveys citing ranges roughly from the low-$2,000s to the high-$9,000s depending on complexity and deliverables.
Whether you pay 0.8% of assets or a $6,000 annual flat fee, build those costs into your withdrawal plan and ask for a transparent, written fee schedule.
Con: Not every advisor is bound to the same standard
In the U.S., investment advisers owe clients a federal fiduciary duty, a higher standard that requires putting clients’ interests first and providing full and fair disclosure of conflicts.
Broker-dealers, by contrast, operate under Regulation Best Interest (Reg BI) when recommending securities to retail customers, a robust “best interest” standard but not the same fiduciary duty that applies to advisers across the entire relationship.
This patchwork can be confusing. If “fiduciary, all the time” is important to you, explicitly look for fiduciary financial advisors (registered investment advisers or their representatives) and confirm in writing which standard of care applies in your engagement.
Con: Complexity risk
Some advisors add layers of products or strategies that don’t meaningfully improve your outcome, and can increase cost, taxes, or illiquidity (for example, unnecessary annuity riders, niche alternative funds, or overly fragmented accounts).
Complexity isn’t a virtue without a clear purpose. Ask for a plain-English investment policy statement, tax rationale for each account type, and a one-page map of how everything fits together.
Con: Less DIY control
If you love tweaking allocations or harvesting losses on your own schedule, ceding day-to-day control may feel frustrating. Even with a collaborative advisor, rebalancing windows, trading cutoffs, or model portfolios can constrain your tinkering. A good fit often hinges on how much discretion you want the advisor to have, whether full discretion, shared, or “advice only.”
How to Decide:
1) Start with your situation
- Portfolio size and complexity. Multiple account types (IRA, Roth IRA, 401(k), HSA, taxable brokerage), company stock with special tax treatment, or concentrated positions tilt toward professional guidance.
- Time and temperament. If you have limited time or market volatility keeps you up at night, the “coaching” and structure an advisor offers may be valuable.
- Tax bracket and RMD horizon. With RMDs generally starting at age 73 (and moving to 75 in 2033), the years between retirement and RMD age can be prime time for bracket-management and Roth conversion planning—work that many advisors excel at.
2) Define the engagement you want
There isn’t just one way to work with a professional. Consider:
- Advice-only / flat-fee planning. You keep control over accounts; the advisor builds the roadmap and checks in periodically. This can be cost-effective for confident DIYers
seeking a second set of eyes
- Comprehensive wealth management. The advisor handles ongoing portfolio management, tax coordination, and retirement income implementation.
- Project-based planning. One-time Social Security optimization, pension vs. lump-sum analysis, or “retirement-ready” reviews.
3) Vet for trust, transparency, and fit
When interviewing trusted financial advisors, ask for straight answers to these questions:
- Are you a fiduciary at all times for me?
- How are you paid, exactly? (AUM percentage, flat fee, hourly rate, or commissions. Request a schedule of services and what’s included.)
- What does a first-year plan include? (Retirement income plan, tax plan, investment policy, estate/beneficiary review.)
- How do you manage taxes? (Asset location, withdrawal sequencing, loss harvesting, Roth conversion analysis.)
- What’s your investment philosophy and evidence for it? (Diversification, factor tilts, rebalancing discipline.)
- Who is my day-to-day contact and how often will we meet? (Cadence matters in the first retirement years.)
Example Scenarios: When Hiring Pays Off
Imagine you and your spouse are in your early 60s, both high earners, finally ready to step away from work. Most of your savings are tied up in tax-deferred accounts, and you’re worried about what will happen when required minimum distributions (RMDs) begin at age 73.
A trusted financial advisor can build a detailed, multi-year tax projection for you, showing how strategically timed Roth conversions can fill up lower tax brackets in the “gap years” before Social Security and RMDs kick in. This approach may lower your lifetime tax bill and give you more flexibility later, since Roth dollars grow tax-free and aren’t subject to RMDs at all.
Or maybe you’re a single retiree who cares deeply about leaving a legacy. You want to support a favorite charity and pass wealth to loved ones in a tax-smart way, but figuring out how to coordinate beneficiary designations, plan for qualified charitable distributions (QCDs) after age 70½, and decide which assets to gift can feel overwhelming. A fiduciary financial advisor can help you turn these moving parts into a clear plan—integrating your investments, withdrawals, and estate documents so your intentions are carried out exactly as you envision.
Perhaps you’re an executive who spent decades accumulating company stock inside your 401(k). Retirement means you face a one-time decision: whether to use net unrealized appreciation (NUA) tax treatment by distributing the shares in-kind or simply rolling everything into an IRA. This is a complex choice with major tax implications—and you only get one shot to do it right. A financial advisor can walk you through the trade-offs, model the outcomes, and help you choose the path that preserves the most after-tax wealth for your future.
Example Scenarios: When DIY Can Work
If your accounts are straightforward and you enjoy digging into personal finance, you may not need ongoing management at all. Suppose you already have a well-diversified, low-cost portfolio and only modest tax complexity. In that case, you might simply check in with an advice-only planner once a year (or even every few years) just to make sure you’re still on track. This lets you stay hands-on with your investments while still getting a professional second opinion when you want one.
Or maybe you’re still in the early stages of building wealth. Your focus is on maxing out tax-advantaged accounts (up to $23,500 for a 401(k) in 2025, plus catch-up contributions if you qualify) and building a solid emergency fund. In this phase, you may not need a full-time advisor. A simple, low-cost index fund portfolio and a clear savings plan could be all you need until your situation becomes more complex.
Considerations for 2025
Before you hire an advisor (or decide to go it alone) there are a few specific issues to keep in mind.
First, contribution and catch-up rules are evolving in 2025.
If you’re a high earner, double-check that your employer plan is set up correctly for Roth versus pre-tax contributions, and confirm how any catch-up contributions will be handled. The IRS is still finalizing guidance on certain provisions, and mistakes here can lead to missed savings opportunities or unexpected tax bills. This is an area where a trusted financial advisor who keeps up with the latest rules can help you avoid unpleasant surprises.
It’s also important to get clarity on exactly what services an advisor will provide.
At your first meeting, ask for the firm’s Form CRS (Client Relationship Summary) and a written engagement letter. These documents explain which standard of care applies to your relationship (fiduciary duty or Regulation Best Interest) and outline who will be on your service team and how often you’ll meet. Reviewing these disclosures carefully will help you compare advisors on an apples-to-apples basis and ensure you know exactly what you’re paying for.
So, What’s Best for You?
Hiring a financial professional before retirement can meaningfully improve outcomes, particularly around tax planning, withdrawal sequencing, and sticking with a long-term strategy when markets get choppy. However, the trade-offs are real: advisory fees, the need to vet standards of care, and the risk of unnecessary complexity.
If you choose to work with someone, prioritize fiduciary financial advisors who serve your best interest at all times, and insist on fee clarity and a written plan.
If you decide to stay DIY, consider commissioning a one-time plan or periodic review to stress-test your approach. Either way, a clear strategy that reflects the 2025 rules (RMD timing, contribution limits, and Roth nuances) will put you in a stronger position to enjoy the retirement you’ve worked for!
Anantha Nageswaran is the chief editor and writer at TheBusinessBlaze.com. He specialises in business, finance, insurance, loan investment topics. With a strong background in business-finance and a passion for demystifying complex concepts, Anantha brings a unique perspective to his writing.
