In America, fears about money are very real and very pressing. In fact, according to a recent Allianz Life survey, a shocking 64% of Americans are actually more worried about running out of money than they are about death.
This is actually understandable, given the fact that there aren’t a lot of safety nets in the U.S. if you run short of funds as a retiree. While you have Social Security to help support you, your retirement benefits can leave you barely above the poverty level if you don’t have extra funds to supplement the benefits. And while Medicare can cover your healthcare as a senior, there are still premiums to pay and many coverage gaps that could leave you afraid of medical bills bankrupting you and your loved ones.
Of course, just because it is understandable to be afraid of going broke as a retiree doesn’t mean it’s a good way to live or that a retirement full of these financial fears is the retirement you should plan for or that you deserve. You should have the confidence of knowing that your funds will last so you can enjoy your later years, and there’s one surefire way to significantly increase the chances of that happening: Working with a financial advisor.
A financial advisor can help you overcome your fears of running out of money
Working with a financial advisor can go a long way towards ensuring that you don’t spend your senior years worrying about emptying your bank account and not having the money you need to cover the basics.
In fact, research from Northwestern Mutual’s 2024 Planning and Progress study revealed that Americans who work with a financial advisor actually have around double the retirement savings compared with those who have no help from a financial professional. Those with an advisor are also more likely to have an emergency savings, to have a realistic financial plan that takes economic shifts into account, and to plan to retire at a younger age.
If you can double the amount you have saved, this can be a key first step in eliminating your fears of ending up with empty bank accounts as a retiree.
How does a financial advisor help you eliminate money worries?
Financial advisors provide comprehensive help with retirement planning and money management issues, and the assistance they offer can be helpful in important ways in making sure your money lasts through your entire retirement years with little to no chance of your accounts emptying too soon.
Some of the different ways that your advisor can help include:
- Working with you to improve the big picture of your finances: You have to get into a financially stable place in order to be able to save successfully for retirement. An advisor helps you to make all of the decisions and plans necessary to achieve this goal, starting from where you are. If you have a lot of debt and no budget, for example, your advisor can help you develop a plan to overcome these issues so you can get on a firmer financial footing and be able to save consistently.
- Helping you to set clear retirement investing goals. It’s hard to figure out how much to save for retirement, but an advisor can help you set goals based on your chosen retirement age, income, and likely future Social Security benefits. Setting a goal is the first step to achieving it, as determining how much money you will ultimately need invested in the end is key to figuring out how much to contribute to your accounts over time.
- Assisting in choosing the right investment accounts. You have different tax-advantaged account options available to you, including traditional 401(k) and IRA accounts that provide upfront tax breaks, and Roth accounts that defer your tax savings. You can work with an advisor to explore which option makes the most sense for you.
- Picking the right investments. Your advisor can assist you in determining what mix of assets to invest in to maximize your potential ROI while minimizing the risk of losses.
Finally, your advisor can also help you with retirement by working with you to choose a safe withdrawal rate. Doing all of these steps can go a long way toward eliminating your fears of the money running out, so you can overcome the fear of a fate that so many Americans think would be worse than death.
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