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As we reflect on 2022 and digest the economic volatility we saw last year, the need for having and financial plan seems more urgent. With high inflation levels, an increased cost of living, and rising interest rates, we’ve been hearing from many individuals that they do not feel financially confident or secure. Interestingly enough, it has been revealed that many Americans do not have a financial plan or are letting the current economic uncertainty derail their original plan. In fact, “nearly 70 percent of Americans at or near retirement age have less than $250,000 in savings, according to a recent survey by Schroders, the London-based asset manager.” We found this statistic quite startling, as we believe that financial planning for the long-game is extremely important in order to achieve financial success throughout your lifetime and in retirement.
While some may not understand the underlying purpose of financial planning, a financial plan and working with a financial professional allows individuals to take both a macro and micro view of their whole financial picture, assess both their life and monetary goals as well as qualitative and quantitative risk tolerances, and set strategies to achieve long and short- term financial success. They are also able to uncover hidden investor and behavioral underlying biases that may be impacting their financial decision making process. Another benefit that comes from creating a financial plan is organization. When creating a financial plan, you are taking inventory of everything that you have, figuring out where it all is, and where it needs to go. Just being organized can immensely improve your feeling of financial confidence and ease.
According to a survey of 1,000 investors across the U.S. between the ages of 45 and 75 by Schroders and 8 Acre Perspective, “76 percent of Americans say they feel overwhelmed by the thought of creating one and 56 percent say life is too uncertain for a plan to have any value”. At Sherman Wealth, we believe that life is complicated, but your finances don’t have to be. We are here to simplify the financial planning process and relieve our clients of some financial stressors they may feel on the day-to-day. Given the rollercoaster the markets took us on last year, many of the “do-it-yourselfers” might be realizing that their life is becoming too hectic to also be navigating their financial picture which is why we are here to help. We believe that it is never to early nor too late to create a financial roadmap for yourself and your family, and that you never need a certain amount of investable assets to get started.