Most people approaching retirement have doubts and worries about financial security. Research suggests that taking steps to organize your finances, project your money forward and create a written plan can greatly alleviate concerns and make you feel more confident about money overall. And, working with a financial planner is one way to boost your financial confidence.
Boomers working with a financial advisor are more likely to have savings for retirement and are more likely to have set a retirement savings goal, according to the Insured Retirement Institute (IRI) “Boomer Expectations for Retirement” report.
It stands to reason that those who work with a financial planner are often better prepared for retirement and have more confidence in their savings plans. But this recent study actually shows this boost in confidence in its survey of baby boomers on the topic.
In fact, the percentage of Boomers working with a financial advisor who are highly confident in having sufficient savings to live comfortably throughout their retirement years is more than twice that of Boomers who are planning for retirement on their own, IRI data show.
Misconceptions about what meeting with a financial advisor is like could be derailing you from getting a jumpstart on your retirement planning, industry experts say.
If you’re still on the fence about whether working with a financial advisor is right for you, Founder and Principal at Las Vegas-based Belmore Financial, LLC Kate Holmes says you’re not alone, adding that some folks think financial planning will be too overwhelming, or that they don’t have enough wealth to justify working with one.
“The idea of gathering a ton of documents to have analyzed then be told everything you need to change tends to sound worse than getting a root canal,” Holmes says. “People often think financial planning is only for the wealthy, but budgeting, taxes, investments, insurance and estate planning affect everyone.”
In addition, some might fear they’ll be told what they don’t want to hear, or worse.
“They might fear they’ll be told they’re not at all on track to meet their goals and have to make drastic changes, or have concern or prior experience that a planner will speak over their head,” Holmes says.
Financial planning is about discovering your happiest life and creating a financial plan to get there, Holmes says.
Here are some key words of wisdom to make the most of your first meeting.
“Asking friends and family for a referral is also a good place to start, but remember, some people that call themselves financial planners are actually commissioned salespeople,” Holmes says.
“Make sure you’re comfortable with your planner,” she says. “There shouldn’t be any pressure to make an immediate decision or sign anything.”
“There are no stupid questions,” she says. “You shouldn’t feel intimidated asking any question, and you’ll want a planner that takes the time to explain everything to you in plain English.”
The data is clear, boomers who work with a financial advisor have much stronger and measurable retirement plans. According to the IRI data:
- Ninety-four percent of Boomers working with a financial planner report having retirement savings versus 68% who report the same without a client-advisor relationship.
- And 74% of those working with an advisor say they have a determined savings goal, versus 40% of Boomers who say the same without working with an advisor.
“Professional advice has a positive influence on other retirement planning behaviors including: increased usage of tax-advantaged savings vehicles, improved asset allocation, and greater portfolio diversification,” IRI says, noting that 53% of Boomers working with an advisor report confidence in retirement expectations versus the 21% of Boomers without an advisor who report the same.
Financial advisors also report seeing clients’ confidence soar through the retirement planning process.
“One of the toughest parts of retirement is losing that steady paycheck, so confidence often comes in determining your monthly income needs, where that income will come from, and automating it,” Holmes says. “There are people that fear they don’t have enough saved up to meet their goals when, in fact, they do; and others that feel they have sufficient funds, but find out they don’t. That’s something a good financial planner can help with.”
For those who are ready to take action and work with a great financial planner, you can start to see results almost immediately, she says.
“People often don’t know exactly what their goals are, but financial planners can help clients realize their dreams beginning in the initial meeting,” she says. “Financial planning isn’t all about numbers and calculations. It’s about honest conversations, embracing what makes us happiest, and creating a plan to go after that.”
