Home Articles When do I need a financial planner along with a CPA in...

When do I need a financial planner along with a CPA in retirement?

How does a CPA or Accountant help retirees?

A CPA, or a Certified Public Accountant, is going to help you specifically with filing and preparing taxes every year. 

CPAs are very important because they work with a very precise and specific set of rules and regulations from the IRS. They are experts in this field and their job is to make sure, come tax season, you are minimizing the income tax you pay. 

With all that said, CPAs are tax preparers, meaning they help you with taxes of the past. When you get your taxes prepared by a CPA, they are looking at the previous years taxes. As tax rules do not change retroactively, CPAs are able to be very precise in their work. 

CPAs are not going to give you a tax plan for the future though, and that’s where a CFP® can help.

How does a CFP®, or a Certified Financial Planner professional, help retirees?

A CFP®, or a Certified Financial Planner professional, is going to work as a tax planner, meaning they look into the future of your finances and income tax. 

While this is not as precise as the work a CPA does, an experienced Certified Financial Planner professional is still going to be able to pretty accurately come up with a tax plan for  5-10 years into the future. This can only be done though if they are regularly monitoring your plan to make appropriate adjustments if any changes in the tax law occur. 

Many aspects of retirement are affected by taxes that you might not have even thought of, including:

-Social Security: Your Social Security is taxed to the extent of your “other taxable income” in any given year. You are in control of when you receive income from your IRAs, 401k, deferred taxable income from annuities, and life insurance. If you take too much in any year, up to 85% of your Social Security check could be taxed. A CFP® can come up with a plan to efficiently distribute your money. 

-Medicare: If you have a higher income, you might be subjected to IRMAA, or the Income Related Monthly Adjustment Amount, which is a surcharge on your Medicare. This can amount to over $10,000 a year.  Many retirees fall into the IRMAA by taking too large of distributions from their taxable accounts. A CFP® can come up with a  plan to distribute your money in a tax efficient way. 

-Long Term Care: Premiums for qualified long-term care insurance policies are tax deductible if they, along with other unreimbursed medical expenses, exceed 10% of the insured’s adjusted gross income. Nursing home and home health-care costs can be a deductible medical expense. 

-IRAs: Roth IRAs, life insurance loans, and savings accounts can be a source of tax free income. If you are interested in lowering your taxable income in retirement, a CFP® can come up with a plan for this. 

It is important to note, not all financial planners are CFP, or Certified Financial Planner Professionals. A CFP® professional has to take an exam as well as meet multiple requirements to hold the certification.

A CFP® is also required to work at the fiduciary standard, meaning that they have to put the interests of the client first both legally and ethically. Make sure the financial planner you are working with is, if not a CFP®, at least working for you as a fiduciary. 

Most people who want to have a relaxing retirement, especially in regards to their finances, are going to have a long-term financial plan in place that they are following. While it might not go perfectly, having the trusted guidance of a CFP® and a CPA are going to make it go smoothly, especially if these two professionals work together. 

At Cardinal, we have multiple CFP® professionals, and we partner with CPAs to make sure that we know what is going on with our clients finances. If you are interested in learning about our process, fill out the form below or give us a call! 


Listen To Finishing Well on Truth

Newest Live Episodes of Finishing Well are on The Truth Network

Finishing Well
Finishing Wellhttps://www.cardinalguide.com/finishing-well/
Retirement planning involves a lot more than just managing your money. This show is the complete guide to planning for and living in retirement, helping families finish well. Host Hans Scheil will discuss a new topic every week ranging from Social Security and Medicare to IRAs and taxes. Follow along each week by downloading the corresponding chapters below for free! New episodes air: Finishing Well Schedule on Truth Network
- Advertisment -

Recent Posts

The Four Horsemen of the Apocalypse | Sunday Message

Many people have questions about the end, Armageddon, and the Antichrist. But in this Sunday morning episode, Pastor Greg Laurie encourages us to look...

The Promises of God – Part 1 of 1

“For all the promises of God in him are yea, and in him Amen, unto the glory of God by us” II Corinthians 1:20.

Are You In or Out? | Luke 9:57–62 | Our Daily Bread Video Devotional

Are you in or out? Yes or no? Left or right? Sometimes life forces big decisions on us without much notice. Maybe you’ve had...

Loving in Spite of: Rerun

Welcome to Masculine Journey fellow adventurers! This is a previously recorded Podcast episode. The guys discuss loving someone in spite of their quirks, faults or characteristics. There is a lot to unpack here, so enjoy. The clips used come from the...

What Makes God LAUGH?

" Hey King Of Kings, I'm Here All Week" 🙂

Medicare’s Annual Choice: The 2 paths of Medicare

Every year, Medicare beneficiaries have the choice of 2 paths, and they can only pick one. Hans and Robby go over both paths, as well as the pros and cons.    Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for...

Loving in Spite of After Hours: Rerun

Welcome fellow adventurers! This is a previously recorded Podcast episode. The guys continue their talk on loving in spite of, right here on the Masculine Journey After Hours Podcast. There's no advertising or commercials, just men of God, talking and...

Amazing Love (Part 1 of 7)

Although Jesus often urged His listeners to pay attention to His teachings, the religious leaders resisted hearing about God’s amazing love. Their attitude reveals the greatest barrier between God and man. Hear more on Truth For Life with Alistair Begg.

Why Israel Matters: A Classic Conversation with David Siegel

In this classic interview, Pastor Greg Laurie sits down with then Consul General for Israel, David Siegel, for a conversation about the significance of...
%d bloggers like this: