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

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.

According to research for Northwestern Mutual, retirees working with advisors report retiring earlier and having greater confidence in their financial preparedness. Among those with advisors, 75% feel financially prepared for retirement compared to just 45% without professional guidance (6).

Additionally, if you lack the time, interest or expertise to manage these decisions independently, professional guidance can help prevent costly mistakes that may far exceed advisory fees.

When going solo might work

You might consider managing your own finances if you have a relatively straightforward financial situation, feel confident making investment decisions independently, have the time and willingness to stay informed about tax laws and market conditions or primarily need basic portfolio oversight rather than comprehensive planning.

For those choosing independence, modern tools make DIY retirement planning more accessible. Low-cost index funds, robo-advisors typically charging around 0.25% annually and widely available educational resources provide viable alternatives to traditional advisory relationships.

What to know before deciding

Retirement doesn't mean your financial planning needs disappear — they change. The decision to keep or cut an advisor shouldn't hinge solely on portfolio size, but rather on the complexity of your financial situation, your confidence in managing it independently and the scope and quality of services your advisor actually provides.