According to a survey conducted by consumer research firm Hearts & Wallets, people who are confronted with daunting financial tasks tend to use the time-tested method of attacking them: running away. The old “pretend it isn’t a problem and maybe it will go away” method is favored by most age groups in the survey. At the same time, people across all age groups are also admitting that a range of financial tasks are more important for them than ever before. This is where our industry comes in. There are a group of people that say they would never use a financial planner because of the cost. But what is a better strategy: paying a professional to help guide you through the complicated retirement process or closing your eyes and hoping for the best? I would imagine that even after paying a financial professional, the first strategy will yield better outcomes close to 100% of the time.
For retirees and pre-retirees, there are two tasks that stand out as being extremely important. The first is “knowing how to find resources and plan financially in retirement” which sounds an awful lot like how to pick a good financial planner. The second is “developing a strategy to withdraw from multiple accounts”. If you do a good job on the first task and pick a competent, fee-only fiduciary financial planner, he or she will certainly develop a plan to help with the second part.
For “Accumulators,” the group that is more than five years away from retirement and still working and saving money for retirement, the biggest needs are “choosing investments” and “handling market volatility emotionally.” If you listen to our radio show, you know that every time we see a bout of market volatility, our firm addresses it quickly with an email giving our thoughts about what is happening, why it is happening, and our strategy for getting through it. Because we have chosen investments appropriately up front, this strategy is usually to remain calm and not make any rash moves unless we feel there is a reason to do so, which there rarely is.
Accumulators are not the only group that has trouble picking investments, this is a pain point across all ages. In fact, almost half of pre-retirees and a quarter of retirees also have this problem. However, most of them never do anything about it. 16% of those Accumulators who have trouble picking appropriate investments actually seek help with it. That leaves 84% of them without any help, either ignoring the problem or picking blindly. Accumulators are not alone in this, as only 11% of pre-retirees who have trouble “developing a strategy to withdraw income from multiple accounts during retirement” have looked for help on this topic.
From the survey, it appears that simply getting started is the biggest obstacle to many people. This can be caused by not prioritizing finding a financial planner, disorganization, or the embarrassment of having someone else tell them what they already know. Don’t let these things stop you. Get your financial future in shape by going to see a fee-only, fiduciary Certified Financial Planner™, and do it sooner rather than later. I guarantee you that no matter how bad you think your financial fitness is, they have seen worse. In our 20+ years of combined experience, we have seen almost everything, and there is very little that shocks us. Our goal is to help, not to belittle you. Take that first step on your path to financial freedom.