I'm retired at 62 with a secure nest egg — do I still need a financial advisor, or can I cut the fees and go solo? What to know before deciding

This occurs when market downturns strike early in retirement, forcing retirees to sell investments at depressed values to fund living expenses. Even if markets eventually recover, those early, irreversible losses can permanently reduce a portfolio's longevity.

Withdrawal sequencing — the strategic order in which different account types are accessed — presents another critical complexity. Taking money from the wrong account at the wrong time can trigger unnecessary or avoidable tax bills.

Retirement Researcher explains that optimizing a withdrawal strategy requires understanding how taxable accounts, tax-deferred retirement accounts, and Roth accounts interact (2).

Rising healthcare costs and potential long-term care expenses can devastate even substantial savings, while longevity risk — the possibility of outliving your money — looms larger as life expectancies continue to increase.

What are you actually paying for?

Before deciding whether to cut ties with your advisor, understanding what you're paying is critical.

According to the 2024 Kitces Report, as cited by SmartAsset, advisors who charge based on assets under management (AUM) typically do a rate around 1% on portfolios up to $1 million, with rates generally declining beyond that threshold (3).

On a $1 million portfolio, that 1% fee translates to $10,000 per year. Over a 20-year retirement, assuming continued portfolio growth, total fees could reach $300,000 or more. That's a substantial amount of money coming out of your pocket.

However, fee structures vary widely across the industry. AUM fees tie advisor compensation to portfolio size, meaning advisors earn more as your wealth grows but also experience reduced compensation when markets decline.

According to research from Mezzi, annual retainer or subscription models typically cost between $2,500 and $9,200 per year, with a 2024 median of $4,500 (4). The 2024 Kitces Report also found that hourly advisors charge a median rate of $300 per hour for standalone or project-based consultations (3).

Does the value justify the cost?

Research suggests that high-quality financial advisors can add substantial value beyond simple portfolio management.

For example, SmartAsset found that advisors' mix of behavioral coaching, comprehensive financial planning, investment strategy and tax optimization can generate approximately 2.39% to 2.78% higher annual returns compared to many self-directed investors (5).

For retirees, advisors typically design tax-efficient withdrawal strategies, coordinate Social Security claiming decisions, manage required minimum distributions, adjust asset allocation to balance growth and capital preservation and address healthcare and estate planning considerations.

The question then becomes whether the value of these services justifies the ongoing expense in your specific situation.

You might benefit from continuing with an advisor if you have multiple income sources that require coordination, large tax-deferred accounts that need strategic withdrawal planning, concerns about emotion-driven investment decisions during market volatility or complex estate-planning needs.