Confidently Confronting Uncertainty

The following question was posed to over 1,000 U.S. adults in a recent Gallup poll:

How much control – your ability to influence or impact - do you feel you have over your efforts to build and maintain your retirement savings in the current environment?

Investment Financial Retirement Planner and Advisor NC

Investment Financial Retirement Planner and Advisor NC

Powerless Not surprising, the results of the survey indicated that the vast majority (about 60%) felt that they had little or no control.  There is no wonder that when it comes to investing and accumulating assets for long-term financial goals that investors feel powerless. After all, some of the financial, economic and political challenges we are currently experiencing are on a global scale and unprecedented.  It will likely take a decade or more for these issues to be fully resolved. The thought of investing when there is so much uncertainty is certainly daunting.  However, for some, this feeling of powerlessness is creating a serious obstacle to making financial progress. How can investors overcome their fear and powerlessness in order to take actions that will propel them forward to achieve their financial goals? Having a plan helps! According to the poll, among those investors with a written financial plan having specific goals and targets, 88% of retirees and 80% of non-retirees say their plan gives them confidence they can achieve their future financial goals. Why does having a financial plan bring so much empowerment to investors?  In our experience, here are a few of the benefits that can be derived through the financial planning process:

1) A financial plan provides a realistic assessment of where you stand.  Are you on track?  Do you need to save more?  Are you saving to the most appropriate type of accounts?  Is your portfolio appropriate given your return requirements and risk tolerance?

2) A financial plan addresses the possibility of financial hardships.  Do you have adequate emergency savings?  What happens if inflation is high and/or investment returns are low during your retirement period?  Can you afford to self-insure against long term care costs or should you consider long term care insurance?

3)  A financial plan helps to identify opportunities.  Is a Roth conversion appropriate?  Should you pay more toward your mortgage or consider refinancing?  Are there opportunities to reduce your current or future tax burden?

Confidence, Peace of Mind & Empowerment We have found that going through the financial planning process provides an element of certainty and an idea of what can reasonably be expected in the future.  Identifying best case and worst case scenarios and developing a game plan of how to mitigate risks, generally provides confidence, peace of mind and a sense of empowerment to those who go through this process.If you have any questions, or would like to discuss alternatives that can help you confidently confront an uncertain future.  Please feel free to contact our office