Are You Confident About Your Financial Future?
Understanding your unique financial goals, needs, and attitudes toward money are essential in determining how confident you are about your future finances. A recent study published by Northwestern Mutual examines US adults by generation to understand attitudes and behaviors toward money, financial decision-making, and financial security.
The study found that two-thirds of Americans believe that they need to focus more on their financial planning needs. But while YouTube, TikTok, and Instagram may be the go-to for many other DIY needs, when it comes to money, people prefer professional advice from a trusted financial advisor. There is a lot of information to be gathered from web resources but putting it all together in a way that is most effective for your unique financial needs is the key to future financial success.
The One Thing Every Generation Worries About
Across all generations, being financially prepared for retirement is the biggest worry. Of Gen Z, Millennials, and still-working Boomers, merely 50% expect to be prepared for retirement. Gen X is the outlier – only 45% of Gen Xers are confident they’ll be ready for retirement.
Younger generations also expect more of the burden to fall on them. Gen Z and Millennials don’t have high confidence that Social Security will be a significant retirement resource for them. If it’s around (42% don’t think it will be), they are only counting on it to provide 15-20% of their future retirement income.
Younger Generations Expect More from Financial Planners
The study found that all generations value financial planners for their professional expertise and for helping them think long-term and stay on track for goals. But Millennials and Gen Z are seeking a more robust relationship with an advisor. For them, aligning finances with values, saving time, and keeping them up to date on changes to financial legislation or changes that will impact them is a must. They are also looking forward to collaborating on more areas of their financial lives from evaluating their employee benefits packages to understanding how to best make major purchases like new cars, home improvements, and vacations. They are looking to balance saving for their futures while maintaining an enjoyable lifestyle today filled with experiences that their parents and grandparents put off until they were ready to retire.
How Can You Build a Confident Financial Future?
A key finding of the study is that people who work with a financial advisor are much more confident about their financial journey, from retirement to handling unexpected expenses to achieving financial security.
It comes down to selecting a financial advisor that understands your priorities. And while these are both specific and different for everyone, the stage of life you are in creates a set of challenges that everyone may face at some point. For instance, at Beyond Wealth we specialize in starting the financial planning journey with mid-career professionals that have some complexity to their current finances. While all of these clients have very unique backgrounds and goals, they have similar concerns that need to be addressed.
These may include:
Cash flow planning
Career advice and planning, from getting the most out of benefits to analyzing equity compensation like RSUs and stock options
Retirement savings vehicles
Understanding what it means to become “work optional”
Minimizing taxes
Ensuring you have adequate insurance, including life and liability
Saving for kids’ education
Tax planning for the future
For many people, the overall goal is to have confidence and flexibility. An understanding of the choices available to you and what the trade-offs are is a more modern way to think about financial planning. It goes far beyond investments alone.
The modern financial advisor is more of a quarterback who brings together all the other professionals in your life so you can see the entire picture and then make educated decisions. As you move through your journey and things change, you can adapt and continue to thrive thanks to the ongoing advice you gain from a relationship with your financial advisor.
Technology Is a Key Attribute
A good relationship relies on strong communication, and today’s investors have emphasized their want for their advisor to be tech-forward and accessible. If you’re considering working with an advisor, ensuring that they are available to you in all the ways you prefer to communicate can keep you both informed and build trust. It’s important to have your financial information at your fingertips through a Personal Financial Website and collaborate with your advisor easily through secure document sharing and email communication. Your advisor should understand that you may not only be thinking about your finances during normal business hours and need access to review your information at the times that are most convenient for your busy lives.
What’s Next?
Once you’ve decided you want to build a relationship with an advisor, it’s important to learn if the advisor specializes in working with people like you. During your conversation with possible advisors, we encourage asking questions as you start the process of finding a perfect match for you and your family. We have compiled a guide to help you choose the right financial advisor.
The Bottom Line
Working with a financial advisor can help you build the future you want, while keeping you calm and peaceful in the present. You want to be able to enjoy your life now and have options for the future. Finding the right advisor for your life stage, with the expertise you require, is easier now than ever.
Brandy Branstetter, CFP®