We earn $300K a year, but only have $5K saved. Do we need a financial advisor?

Who does, and does not, need a financial advisor

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Question: My husband is 48 years old, and I’m close to 40. We have two young kids. For many years, we were barely getting by. I have student loan debt from graduate school, though my husband recently finished paying off his loans. At the end of every year, our savings are gobbled up by taxes or unexpected expenses like moving or medical debt incurred by our children’s births. We only have about $5,000 saved for retirement. A couple years ago, we moved to a city where our expenses were much reduced. Recently, due to unexpected career success, my husband’s income doubled, and last year, he earned close to $300,000. Is it too late for us to build a sound retirement portfolio? And if not, would it help us to hire a financial advisor? (Looking for an advisor too? You can use this tool to get matched with a financial advisor who may meet your needs.)

Answer: The good news is that it’s not too late to accumulate wealth for retirement, but you will need to save and invest a chunk of your earnings and possibly work longer, pros. “You may be pleasantly surprised to discover how much you can accumulate if you commit to saving for the last decade or two of employment,” says Brenda A. Morris, a certified financial planner at Humane Investing. Adds says Bridget Venus Grimes, the president of Wealth Choice: “It may be that these folks have to work longer, save more and spend less, but there [should] be a plan.”

And that plan may well need to be developed by a financial advisor, as this couple may want and need help with where to start and how to get where they need to go. You can use this tool to get matched with a financial advisor who may meet your needs. Of course, not everyone needs to hire an advisor to get on track financially, and this guide will help you figure out whether or not you need a financial advisor.

Thinking about hiring a financial advisor or have an issue with your current one? Email picks@marketwatch.com.

This couple might be best served with a financial advisor who will help them make holistic savings and budgeting plan and guidance on where and how to invest it so that the money grows, pros say. Grimes notes that while many financial advisors do not help with budgeting, there are plenty that do; ask if they do, upfront. Here are 15 questions to ask any advisor you might hire, including questions about how an advisor is paid, and here is a guide on what those new to hiring a financial advisor might want to know.

As Grace Yung, certified financial planner and wealth advisor at Midtown Financial Group, recently told MarketWatch Picks in this column: in general, there are several parts to a financial planning engagement: financial planning, implementation and ongoing monitoring, and “many CFP professionals do all of the above.” She added: “There are CFPs who can be hired on an hourly or flat fee basis to do a comprehensive financial plan,” says Yung, who adds that can often cost an average of $3,000 to $6,000. “The reason for this is that it can take at minimum 10 hours to create a proper plan. Plans generated on that level are usually initiated with an engagement agreement and should include a baseline snapshot, overall asset allocation, scenarios with general recommendations and action steps with a written summary,” says Yung. As for specific recommendations on investments of strategies, Yung says they’re usually completed separately.

No matter whether you hire a pro or not, start getting your finances together now

Start now, with a solid plan that will help you finally retire. And be prepared for speed bumps along the way. Morris recommends focusing on things that you can control, like how much you spend, how much you save, and when you want to retire. The markets will fluctuate naturally, but a good way to stay focused is to stick to your immediate goals. To help yourself do it, try to dream up some things you’ll do in your golden years, whether it’s play golf all day, travel to visit the pyramids in Egypt, or just spend time finally resting after so many years of struggling to get by.

Questions edited for brevity and clarity

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