Financial Planning for the Middle Class

It’s no secret that financial advisors prefer to work with wealthy people. Speaking from experience, managing a $2,000,000 account only takes a little more time and energy than managing a $500,000 account, yet the $2,000,000 account generates nearly 4x more revenue for the advisor. An advisor who fills their practice with smaller accounts will deal with more headaches while receiving lower compensation. I’m pointing this out to illustrate why advisors don’t spend as much time going after the middle class. That doesn’t mean middle class people don’t need good financial advice! They very much do.

Fortunately, many advisors (at least in the independent channel) are willing to work with people that aren’t multi millionaires. In many ways they need more help because planning their eventual retirements, how they might pay for kid’s education costs, etc, is much more of a careful balancing act. So don’t be shy about getting some good financial advice. We all know navigating everything from investments to taxes to estate planning and life insurance requires a huge amount of knowledge which many people don’t have.

 The crazy part is that people with less money to invest often wander into their banks and end up sitting down with a commission-based bank broker who pitches them on some sort of illiquid bank CD or insurance product which doesn’t actually meet their needs or fit their financial profile. In my experience, its best to steer clear of the banks and locate a fee-based advisor who will really hear you out, remain your primary point of contact, and gain a full understanding of your needs: so what typically are the needs of the many millions of middle class Americans?

Saving through company retirement plans including the 401k and 403b – it’s important to go over the options in your retirement plan, especially if it’s the primary vehicle which you’ll use to save for retirement

Going over social security options – For many Americans, social security payments will play an urgent part of your retirement income. Understanding the pros and cons of starting that income stream at various ages is important, and should be worked out in conjunction with your other assets and income sources.

Funding college costs for family — there is a lot to discuss here and most trained advisors can go over these options with you, many of which offer tax benefits including deductible contributions and tax-free growth.

Figuring out your insurance needs – Does one person in your marriage or family earn more than the others? Could the family survive and maintain their lifestyle without that income earner? Do you have mortgages and kids to worry about? Insurance is a highly useful financial planning and estate planning tool which an advisor should go over with you. The younger you are when locking in your insurability, the better.

Investing after-tax dollars - with interest rates at rock bottom levels, it’s good to explore what you may be able to do with your cash while its sitting on the sidelines. A good financial advisor can give you plenty of help with this.

Purchasing a home – One of the most important decisions a person makes should be done with care. There are recommended ratios for what you should spend, how much of a mortgage to take on, what sort of taxes you can handle, all based on your income and your assets. If you aren’t entirely comfortable taking on these issues yourself, the advisor can help. They may also be able to recommend decent professionals to help with the purchase and financing.

These are just the basics and every person has unique needs when it comes to a financial planning relationship. Do yourself a favor and reach out to a professional who charges a reasonable fee and can offer good advice. If you’re in the Long Island / New York City area, you can certainly reach out to me.


Russell Bailyn
Wealth Manager
Premier Wealth Advisors, LLC
14 E 60th Street, #402
New York, NY 10022
P: 212-752-4343 *231
F: 212-752-7673
New York City Financial Advisor

Securities offered through: First Allied Securities, Inc., a registered Broker/Dealer. Member: FINRA/SIPC. Financial Planning offered through First Allied Advisory Services & Premier Wealth Advisors, Inc. Premier Wealth Advisors, Inc is a Registered Investment Advisor. First Allied Securities & Premier Wealth Advisors, Inc. are not affiliated entities.

Leave a Reply

Your email address will not be published. Required fields are marked *

+ one = 10

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>