Planning for retirement

Dear Client,

Recent market volatility has prompted many investors to take a closer look at their financial plans and how prepared they are for retirement. As so many of us have taken a look at our financial plans during this difficult time, I recently learned that two-thirds of Americans have no financial plan. As we are poised to put the current recession behind us, take a look at some of these startling statistics:

Sixty-four percent of Americans have no financial strategy at all.

That’s right – no plan whatsoever to build or sustain wealth. This finding comes from the 2009 National Consumer Survey on Personal Finance conducted by the Certified Financial Planner Board of Standards, Inc. (The survey collected data from more than 1,700 U.S. residents¹.)

Only 17 percent of us have a written financial plan that is updated regularly.

Congratulate yourself if you are in that group! The CFP Board found that just 17 percent of the 36 percent polled who did have a written financial plan had reviewed their plan in light of changing times. Notably, 48 percent said they had benefited from having a written plan.

Just 38 percent of the 36 percent with a written financial plan retain a financial advisor.

The really troubling part is that 37 percent of those with written plans are doing their financial planning on their own. Another 12 percent of respondents with written plans consulted a friend or family member who isn’t a financial services professional for advice.

So, why don’t more people have a financial plan, or if they do have one, why do they not keep it updated?

After all, Americans of all incomes and savings levels certainly are free to set financial goals. In the survey, the reasons varied. Some cited the expense of engaging a financial advisor; some said they get along just fine without a financial plan, and others felt their finances weren’t complicated enough to warrant one. Others were hazy about financial services industry qualifications with 40 percent of respondents having no idea that there were professional credentials or designations for financial advisors.

A financial advisor can help you define your investment goals and create a definite plan.

If you set financial objectives and plan for them, you vault ahead of most Americans – at least according to the CFP Board’s findings. A written financial plan does not imply or guarantee wealth, of course, nor does it ensure that you will reach your goals. Yet your financial plan does give you an understanding of the distance between your current financial situation (where you are) and where you want to be. Too many Americans, it seems, have little comprehension of their financial situation or their financial potential.

How much planning have you done?

Retiring without a financial plan is an enormous risk; however, retiring with a financial plan that hasn’t been reviewed in several years is equally as dangerous. A relationship with a financial advisor can help to bring you up to date about what you need to do, and provide you with more clarity and confidence when it comes to your financial future and retirement.

I am currently taking appointments to review the financial plans of my clients and begin the process of making sure your plan matches your stated goals. DG Private Wealth Management is here to help you plan for a secure financial future. Thank you for allowing us to be your partner, and please call us at 858.752.1726 to schedule a financial plan review today.

Sincerely,

Dion Gouws, CPA