Should I Use a Financial Advisor or Do It Myself?
- Megan Waters, CFP®
- 7 days ago
- 14 min read
If you’re asking “should I use a financial advisor or do it myself”, you’re already doing something most investors skip: you’re questioning whether your current approach is actually built for retirement.
The right answer depends less on your intelligence and more on your complexity, time, discipline, and the cost of one wrong move.
I’ve spent nearly two decades working with high-net-worth families through retirement transitions, market cycles, and “it looked fine on paper” plans.
Here’s the reality: many affluent investors are perfectly capable of managing investments.
What’s harder—and often more expensive—is managing the system around the investments.
Key Takeaways
A clear 3-path decision: DIY, Hybrid (second opinion/project), or Ongoing Advisor
A practical definition of what an advisor should do for a $1.5M+ retiree beyond portfolio management
The most common (and expensive) DIY mistakes after 55—especially around taxes and Medicare
A step-by-step checklist to vet an advisor using Form CRS, Form ADV Part 2A, and IAPD
Guardrails you can implement if you choose to DIY (without “winging it”)
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Should you use a financial advisor or do it yourself in retirement?
If your retirement finances are straightforward and you’re willing to manage investing, creating income through withdrawals, taxes, and insurance decisions with consistent discipline, DIY can work.
If you have multiple accounts, complex tax planning needs, Medicare premium exposure, or you want ongoing accountability and less stress, hiring an advisor—or using a periodic second opinion—may be worth considering.
Start with the real decision (it’s not binary)
Most people frame this as a simple fork in the road:
DIY: I manage everything.
Advisor: Someone else manages everything for me.
But, affluent retirement planning usually works better as a three-lane highway.
Here are three common high net worth retirement planning approaches:
DIY (with a documented process)
Hybrid (DIY investing + professional planning/second opinions)
Ongoing advisor relationship (implementation + monitoring + planning)
The question isn’t “Am I smart enough?” The question is:
Can I run this system every year?
Do I want to?
What happens if I can’t (health, travel, cognitive load, life events)?
A quick self-screen
DIY becomes riskier when you answer “no” to multiple questions below:
Do you have a written withdrawal strategy (not just a “4% rule” headline)?
Can you estimate next year’s taxable income before taking withdrawals?
Do you understand how capital gains, dividends, and IRA withdrawals stack into your marginal tax rate?
Can you coordinate withdrawals with Medicare premium thresholds (IRMAA) and tax planning?
Do you rebalance systematically—even when markets are ugly?
Can your spouse/partner execute the plan if you’re not available?
If you’re thinking, “I can do some of that,” you’re describing the hybrid lane.
What does a financial advisor actually do for a $1M+ retiree?
A retirement-focused advisor’s value is typically less about picking investments and more about coordinating taxes, withdrawal sequencing, Medicare decisions, Social Security timing, risk management, and estate planning implementation.
You can DIY many pieces, but the advisor’s role is to design a repeatable process, reduce unforced errors, and help you stick to the plan across changing markets and rules.
The job isn’t “beat the market”, it’s “run the operating system”
For an affluent retiree, your portfolio is not just an investment account. It’s the fuel source for:
spending and lifestyle
healthcare and insurance decisions
taxes
philanthropy
legacy planning
and often, family support
A strong advisor should be able to answer a very specific question:
“What decisions do we need to make this year, and in what order, so we don’t accidentally create higher taxes or higher Medicare premiums?”
What “good” looks like (services you should expect)
Here’s what a comprehensive advisor engagement often includes for retirees:
1) Retirement income design
Cash flow planning (baseline + discretionary)
Withdrawal sequencing (taxable vs IRA vs Roth)
Coordination with RMDs (when they apply)
2) Tax-aware investing
Asset location (what goes where)
Capital gains management
Year-end tax planning coordination
Potential Roth conversion analysis (not one-size-fits-all)
3) Medicare and Social Security coordination
Managing the “two-year lookback” risk for Medicare premium surcharges (IRMAA)
Timing decisions that affect taxable income and benefit taxation
4) Risk management
Concentration risk (company stock, a single ETF, real estate)
Liquidity planning (cash reserves, near-term spending)
Scenario stress testing (market decline + inflation + longevity)
5) Estate planning implementation support
Beneficiary reviews
Trust coordination (with your attorney)
Titling and transfer coordination
6) Behavioral coaching
A plan is only useful if you follow it. Many investors don’t need “more information.” They need a process that prevents panic decisions.
“In retirement, the biggest risk isn’t usually a bad fund choice, it’s a small number of big decisions made at the wrong time. Good advice creates a repeatable playbook so you’re not reinventing the wheel every year.” — Matt Brennan, CFP®
A note on disclosure (what you should read before you trust anyone)
Advisors should provide clear disclosures about services, fees, conflicts, and disciplinary history. Two key documents:
Form CRS (relationship summary for retail investors)
Form ADV Part 2A (a detailed narrative brochure about the firm)
If an advisor can’t explain these documents in plain English, that’s not “complexity.” That’s a red flag.
What are the biggest DIY risks for affluent retirees after age 55?
DIY risks aren’t about whether you can open a brokerage account—they’re about missing deadlines, mismanaging taxes, and making emotionally driven decisions when the stakes are highest.
The most expensive mistakes often involve retirement account withdrawals (including RMD rules), Medicare enrollment and premium surcharges, concentrated positions, and poorly coordinated tax decisions that create avoidable long-term costs.
The “unforced errors” that show up most often
Here are the patterns we see when capable investors run into trouble:
1) Tax-blind withdrawals
Example: pulling too much from traditional IRAs in a single year, unintentionally pushing yourself into a higher bracket or increasing Medicare premiums.
DIY investors often focus on “how much can I spend?” instead of “what’s the cleanest way to create that spending amount after tax?”
2) Medicare enrollment penalties (deadline-driven)
Medicare has strict enrollment windows, and penalties can apply if you miss them without qualifying exceptions.
Medicare.gov explains that Part B penalties can be an extra 10% for each year you could have enrolled but didn’t.
If you’re retiring around 65, this becomes a planning item, not a “later” item.
3) IRMAA (Medicare premium surcharges) surprises
Affluent retirees often learn about IRMAA after the fact: “Why did my Part B premium jump?”
CMS shows that 2026 Part B premiums can range up to $689.90/month at higher income tiers.
That doesn’t mean “avoid income.” It means: manage the timing of income when you have flexibility.
4) RMD mistakes (and penalties)
The IRS explains that if your distributions are not large enough, you may owe a 25% excise tax on the amount not distributed as required (potentially 10% if corrected within the allowed window).
It’s not hard to take an RMD. It is easy to miss one when you have multiple accounts, custodian transitions, inherited accounts, or health issues.
5) Concentration and liquidity issues
This is the quiet risk in affluent portfolios. And, we see these mistakes frequently.
too much in one stock
too much in one sector
too much illiquid real estate relative to spending needs
It can feel “conservative” until you actually need liquidity.
6) Sequence-of-returns risk (the retirement-specific market risk)
Two retirees can earn the same average return but end up with very different outcomes based on when the bad years happen—especially early in retirement.
DIY investors often underestimate how much withdrawal strategy and cash reserves matter when markets fall.
7) The “capacity” risk (the plan works…until you can’t run it)
Even financially sophisticated households rarely plan for:
who executes trades if you can’t
who manages bills and distributions
how passwords and documents are stored and shared
A strong plan is operational, not theoretical.
How can Medicare IRMAA change your retirement costs—and why does it matter for DIY vs advisor decisions?
IRMAA ties Medicare premiums to income, which means retirement tax decisions can affect healthcare costs.
In 2026, CMS shows total Part B premiums range from $202.90/month up to $689.90/month depending on modified adjusted gross income (MAGI) and filing status.
For affluent retirees, this makes tax-aware withdrawal planning a core part of the advisor-vs-DIY decision.
2026 Medicare Part B IRMAA premiums (official tiers)
Below is the CMS table data reformatted for readability.
2024 MAGI (Single) | 2024 MAGI (Married Filing Jointly) | 2026 Part B Monthly Premium (Total) |
≤ $109,000 | ≤ $218,000 | $202.90 |
$109,001 – $137,000 | $218,001 – $274,000 | $284.10 |
$137,001 – $171,000 | $274,001 – $342,000 | $405.80 |
$171,001 – $205,000 | $342,001 – $410,000 | $527.50 |
$205,001 – $499,999 | $410,001 – $749,999 | $649.20 |
≥ $500,000 | ≥ $750,000 | $689.90 |
Source: CMS 2026 Medicare Parts A & B premiums/deductibles fact sheet (IRMAA table).
Why this matters for affluent retirees
If you’re 55+ with $1.5M+ and you’re actively managing taxes, you may have years with:
capital gains from rebalancing or selling a business/property
large IRA withdrawals
Roth conversion income
one-time income events
Those aren’t “bad.” But they can interact with Medicare premium tiers.
Planning levers (not magic tricks)
A good advisor doesn’t “eliminate IRMAA.” That’s not realistic for many high-income households. Instead, the goal is to choose when income happens (when you have flexibility) and reduce surprises.
Levers commonly evaluated include:
Withdrawal sequencing across taxable, traditional IRA/401(k), and Roth accounts
Charitable strategies (especially for those already giving)
Managing realized gains (where feasible)
Coordinating Roth conversion timing with bracket targets
Avoiding accidental income stacking (e.g., RMD + conversion + large realized gains in the same year)
The point: Once you’re near IRMAA thresholds, DIY requires a tax-first mindset—not just an investment mindset.
How much does a financial advisor cost, and when do fees make sense?
Advisor costs vary widely, but the right way to evaluate fees is to compare them to the specific services you’ll use and the risks you’re trying to reduce.
For affluent retirees, fees may be more defensible when the advisor provides ongoing tax-aware withdrawal planning, Medicare/IRMAA coordination, and accountability—not just portfolio selection. Fees reduce net returns, so clarity on scope matters.
Start with the math (because feelings are expensive)
Let’s keep this simple and transparent.
If an advisor charges an annual percentage of assets (an AUM fee), the cost in dollars is:
Annual fee ≈ portfolio value × advisory fee rate
Example (illustrative only):
$1,500,000 × 1.00% = $15,000/year
$1,500,000 × 0.60% = $9,000/year
Those are meaningful numbers. They should buy meaningful retirement work.
The 4 main fee models (and what to watch for)
1) AUM (assets under management)
Pros: aligned with portfolio size; can include ongoing planning and the advisor has incentive to grow your portfolio because the better you do, the better they do.
Cons: fee rises as portfolio rises; may be expensive if advisor services are investments only.
2) Flat annual fee
Pros: predictable; can be tied to complexity
Cons: some firms under-serve; scope must be clear. Advisors have less incentive to work as hard as possible to grow your portfolio or wealth.
3) Hourly / project-based planning
Pros: great for “second opinions,” retirement readiness, or one-time plans
Cons: may not include ongoing monitoring/implementation
4) Subscription/retainer
Pros: flexibility; planning-first
Cons: quality varies; define deliverables
“Worth it” depends on the value you actually use
A helpful way to evaluate the decision:
If you primarily want investment selection and rebalancing, DIY or low-cost implementation may cover most of your needs.
If you want retirement income planning, tax coordination, Medicare premium awareness, estate coordination, and someone to quarterback the plan, an advisor may provide more value.
“High-net-worth retirement planning is less about chasing returns and more about controlling taxes, managing thresholds, and avoiding preventable mistakes. The value is often in coordination—especially when you have multiple account types and complex income sources.” — Scott Hurt, CFP®, CPA
The “advisor risk” you should name explicitly
Hiring an advisor has downsides too:
Fees reduce net performance over time.
Some advisors have conflicts of interest (especially if product compensation is involved).
You might get generic portfolios or cookie-cutter planning.
A poor fit can lead to worse behavior (overtrading, style drift, abandoning a plan).
This is why vetting matters as much as the initial decision.
How do you vet a financial advisor (and confirm they’re a fiduciary)?
The safest way to vet a financial advisor is to verify registration and disclosures, then test for clarity and alignment.
Start with Form CRS and Form ADV Part 2A, review services/fees/conflicts, and use the SEC’s resources to find an advisor’s filings via IAPD.
Then interview for the process: retirement income planning, tax coordination, and how decisions are documented—not just “performance talk.”
Step-by-step due diligence (a practical checklist)
Step 1: Ask for Form CRS (Relationship Summary)
Form CRS is designed to help retail investors compare professionals—services, fees, conflicts, standard of conduct, and disciplinary history.
Ask:
“Can you walk me through your Form CRS and explain your conflicts in plain English?”
“What exactly is included in your ongoing relationship, and what isn’t?”
Step 2: Read Form ADV Part 2A (the firm brochure)
The SEC explains that Form ADV contains information about an adviser’s business operations and disciplinary disclosures, and that investors can view the most recent Form ADV through IAPD.
What to look for:
Fee schedule and billing practices
Types of clients and services
Conflicts (e.g., related parties, revenue sharing, affiliated services)
Disciplinary disclosures
Custody and how assets are held (you generally want a reputable third-party custodian)
Step 3: Verify through IAPD
Use the Investment Adviser Public Disclosure (IAPD) database to review filings and background. The SEC notes you can view an adviser’s most recent Form ADV via IAPD.
Step 4: If there’s a brokerage component, check FINRA BrokerCheck
Some professionals are dually registered; you want to know which “hat” they’re wearing when they advise you. Review BrokerCheck here.
Step 5: Interview for process (not promises)
We believe the best advisor interviews sound like this:
“Here’s how we make decisions.”
“Here’s how we document and review.”
“Here’s how we coordinate tax planning with your CPA.”
“Here’s how we handle withdrawals, RMDs, and Medicare premium thresholds.”
Be cautious if the interview sounds like:
“We have a proprietary strategy.”
“We can’t explain it—it’s too complex.”
“We’ve never had a bad year.”
Anything that feels like a performance pitch without risk context.
12 questions affluent retirees should ask
Use these verbatim:
Are you a fiduciary at all times when advising me? In what capacity?
What services are included—retirement income planning, tax planning coordination, Medicare/IRMAA planning, estate coordination?
What are the all-in fees (advisory, fund expenses, trading, custody, planning fees)?
How do you decide which account to draw from first in retirement?
How do you handle Required Minimum Distributions (RMDs)?
How do you evaluate Roth conversions (and their impact on taxes and Medicare)?
How often do you rebalance, and what triggers changes?
How do you measure success if it’s not “beating the market”?
How do you coordinate with my CPA and estate attorney?
Who is my day-to-day contact, and who backs them up?
What happens if I become incapacitated—how is the plan executed?
Where can I review your disclosures (Form CRS, Form ADV) and disciplinary history?
When is DIY a reasonable choice—and what guardrails should you put in place?
DIY can be reasonable if you have the time, interest, and discipline to run a documented process—and your situation isn’t overly complex.
The key is to replace “gut feel” with guardrails: a written investment policy, a withdrawal plan, an annual tax calendar, Medicare enrollment awareness, and contingency planning.
Many affluent investors choose DIY investing but still use professional reviews at key life events.
DIY is often a good fit if you…
enjoy financial management and stay engaged year-round
have a relatively simple income picture
can follow rules in down markets
have a partner or backup who can execute the plan
are willing to learn (and keep learning)
DIY becomes riskier when…
you’re dealing with multiple retirement accounts and withdrawal sequencing
you are near (or frequently above) Medicare IRMAA thresholds
you have large one-time income years (asset sales, big Roth conversions, etc.)
you’re managing concentrated stock risk or illiquid assets
your planning depends on “we’ll figure it out later”
A retiree’s DIY guardrail checklist (use this annually)
1) Write an Investment Policy Statement (IPS)
target allocation ranges
rebalancing rules (time-based or threshold-based)
what would cause a strategy change
what would not cause a change (headlines, fear, “hot tips”)
2) Create a withdrawal sequencing plan
taxable vs IRA vs Roth withdrawal order
how you refill cash reserves
how you handle big purchases or gifting years
3) Put RMDs and deadlines on a calendar
RMD rules and penalties are not the place to “remember later.” The IRS outlines RMD timing and excise tax consequences for shortfalls.
4) Run a “tax preview” every fall
Before year-end, estimate:
taxable income range
realized gains
whether any Roth conversions are being considered
whether charitable giving is planned
5) Create a Medicare decision checklist at 64–66
Medicare enrollment windows and penalties can materially change costs. In addition, consider reviewing RMD tax strategies as part of your retirement planning.
Medicare.gov explains the Part B late enrollment penalty framework.
6) Build a contingency plan
who can call the custodian
where documents live
beneficiary review schedule
emergency contacts and professional network (CPA, attorney)
Where a “hybrid” approach shines
Many affluent investors don’t need—or want—full-service, ongoing management. They want:
a professional to stress-test the plan
a tax-aware review of withdrawal strategy
confirmation they aren’t missing a threshold, deadline, or disclosure issue
a second set of eyes in years with big decisions
At Covenant Wealth Advisors, we often see this work well for clients who like managing their portfolios but want a fiduciary planning process around taxes, retirement income, and key decision points.
See How Our Financial Advisors Can Drive More Peace of Mind to Your Retirement
TAX PLANNING FOR RETIREMENT - identify tax reduction strategies including Roth conversions, RMD management, charitable giving and more...
RETIREMENT INCOME PLANNING - find out when you can retire and if you'll be able to maintain your lifestyle.
INVESTMENT MANAGEMENT - personalized investing to grow and protect your wealth in retirement.
Frequently Asked Questions
What is a red flag for a financial advisor?
A red flag is any advisor who won’t clearly explain fees, conflicts, and services—or who avoids providing key disclosures like Form CRS and Form ADV Part 2A. You should also be cautious of performance promises, pressure to act quickly, or unclear custody arrangements. Use official disclosures and verification tools when available.
At what income level do you need a financial advisor?
It’s less about a single income number and more about complexity. Many retirees consider professional advice when they have multiple account types, significant taxable income, sizable IRA balances (RMD planning), Medicare premium exposure (IRMAA), estate complexity, or large one-time events like business sales.
What is the 80/20 rule for financial advisors?
The “80/20 rule” is an informal idea that a large portion of the value may come from a smaller set of activities—often planning, behavior, and coordination—rather than constant trading or “hot picks.”
Use it as a reminder to judge an advisor by process and decision support, not just portfolio performance.
What are some disadvantages of using a financial advisor?
Common disadvantages include ongoing fees (which reduce net returns), potential conflicts of interest, loss of control, and the risk of hiring someone whose approach doesn’t match your goals.
An advisor relationship can also create “false comfort” if you outsource thinking instead of understanding the plan.
Conclusion
If your retirement plan is simple and you enjoy managing it, DIY can absolutely be a rational choice—as long as you’re running a real process, not reacting to headlines.
If your situation includes multiple accounts, tax-sensitive decisions, Medicare premium thresholds, or you want accountability and coordination, the smarter move is often hybrid or planning-first advice. That gives you control without leaving you exposed to avoidable mistakes.
At Covenant Wealth Advisors, our focus is helping affluent retirees make these decisions with clarity—what you can do yourself, what you may want help with, and what should be documented so your plan works even when life gets messy.
Would you like our team to just do your retirement planning for you? Contact us today for a complimentary retirement roadmap experience.
About the author:
Financial Advisor
Megan Waters is a CERTIFIED FINANCIAL PLANNER™ professional and Financial Advisor at Covenant Wealth Advisors. Megan has over 14 years of experience in the financial services industry.
Raised in Williamsburg, VA, Megan graduated from the Honors College at the College of Charleston with a BS in Economics and a minor in Environmental Studies.
Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond, Reston, and Williamsburg, VA. Registration of an investment advisor does not imply a certain level of skill or training. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. This article was written and edited by a CERTIFIED FINANCIAL PLANNER™ professional with the assistance of AI. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible, no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice.