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Financial decisions don’t exist in a vacuum, and the cost of getting them wrong can quietly build up over time. According to the National Financial Educators Council, a lack of financial knowledge costs U.S. adults about $948 each year.

In this episode of Money Wisdom, Jake Doser, CFP®, CPWA® and Nicholas J. Colantuono, CFP® break down five practical ways to sharpen your financial IQ as retirement approaches.

1. Refresh Your Personal Financial Knowledge

Familiarize yourself with the basic financial concepts that apply to your situation. Once you reach retirement, it’s important to understand your expenses, taxes, and how different accounts behave. This often means establishing a budget to effectively manage your money. Even if you don’t usually budget, once retirement rolls around, you need a plan for replacing your monthly paycheck.

2. Apply Those Skills to Your Own Finances

A stark difference exists between knowledge and wisdom. General advice can be helpful, but it becomes more important to personalize it as you approach retirement. If you’re 10 years out from retiring, you need a customized plan based on your lifestyle and spending. When you filter what you hear, you can better determine whether it applies to your specific financial situation.

3. Have Open Conversations About Money

In retirement planning, anyone impacted by your finances should be in the loop. Whether you speak to friends, family, or an advisor, conversations around money are incredibly valuable. You don’t need to share exact numbers, but discussing strategies, risk, and planning can ensure everyone is on the same page and prepared.

4. Use Reputable Financial Resources

Knowing where to get unbiased, balanced financial information can be difficult. But it’s important to be critical when searching for trusted, reputable sources. Whether it’s from books, podcasts, or professionals, you should evaluate and verify any advice you receive. What gives our clients confidence is that we’re independent fiduciaries who focus specifically on retirement planning.

5. Consider Working with a Financial Advisor

Working with an advisor, like those on our team at Johnson Brunetti, isn’t about chasing high returns. We make sure our clients can manage risk appropriately and turn their savings into reliable retirement income. Not only can an advisor validate what you’re learning, but they can also ensure you have a solid plan in place.

Want to put your financial knowledge to the test? Click here to take our Financial IQ Quiz, a quick, 9-question quiz to find out where you stand.