In the wake of the coronavirus pandemic, a new study shows that Americans are becoming increasingly anxious about their finances.
Back in April, Fidelity asked 3,062 retired and working-age Americans about their concerns and what they were doing to shore up their confidence gap. In the survey, 60% of Americans said they were concerned about their finances now. Thirty-eight percent were extremely or very concerned, while over twenty percent were just moderately concerned.
Six in 10 (62%) Americans said they worried about job security, with 43% being extremely or very concerned. 51% of baby boomers said they were worried about their finances over the next 6 months. Meanwhile, 69% of millennials and 68% of Gen Xers also shared that concern.
A Big Life-Changing Impact
The economic disruption of Covid-19 is being felt on a very broad scale. It has had effects in many facets of life.
Four in 10 Americans (43%) said their stress over their finances had worsened. A third said it was affecting their sleep, twenty-four percent their exercise habits, and twenty-three percent their healthy eating habits.
Increased responsibilities both at home and at work due to the pandemic have also been stress contributors.
Almost half (49%) said they didn't have time to check their investments and retirement savings because of the time constraints with these increased duties. Fidelity's survey also found that women were more likely to say they were impacted by the pandemic than men.
What's on Everyone's Minds?
Nearly half of women said they were feeling more anxious about their finances. Meanwhile, thirty-eight percent of men said they were more anxious. This also reflects a finding by researchers showing that women accounted for 55% of the increase in job losses in April, according to NPR.
What about specific financial concerns? Surveyed Americans reported as top concerns:
- Paying down student loan debt
- Having enough saved to retire as they planned
- Paying other debt than student loans
- Having the ability to pay for kids' college education
- Finding the money to pay for other goals
- Having the ability to pay monthly bills
Rethinking Money Management
With the early effects of the pandemic now more in the rearview (and with the uncertainty of what lies ahead), many Americans are also rethinking their finances and improving their financial wellness. Among other things, 34% are rethinking how they manage their money.
There has been a noticeable flight to safety in the investment arena. Vehicles such as fixed and indexed annuities are becoming increasingly popular alternatives to instruments that invest directly in the markets.
Those with a Financial Plan Fared Better
The survey also bolstered the value of having a financial plan for shorter-term goals as well as retirement. Those who had a plan set reported better outcomes than those without one.
Among people with a financial plan, 50% had at least 3 months' worth of expenses in their emergency fund, and only 35% were concerned about paying monthly bills. For those with no plan, respectively, only a third had at least a 3-month emergency fund and 45 percent worried about paying monthly bills.
Having a Financial Advisor Helps
These numbers add to the body of knowledge showing that those who use a financial advisor are much more prepared for financial turbulence than those who don’t.
Those who use a financial advisor tend to be more confident about their financial situations. They are also usually better equipped to make changes in their portfolios, if necessary.
They are also more likely to have an emergency fund stashed away. Not only that, they can usually gauge their financial progress towards achieving specific goals more clearly.
All of this leads to an overall improvement in these people's sense of financial wellness and helps them to achieve their financial goals more often.
What Are the Benefits?
Much of the time, financial advisors are better equipped than their clients to spot opportunities in the markets. They deal with investment, retirement, and income strategies on a daily basis and have practice in structuring them for best outcomes.
Advisors can help you take advantage of tax-saving strategies such as converting traditional IRAs or qualified plan balances into Roth accounts. That can be beneficial particularly in years when someone's income is lower than usual.
Financial advisors can also give peace of mind to people who wouldn't otherwise know if they were on the right track financially or not.
Advisors Can Help You Make Better Sense of Your Money
Advisors who actively manage money can custom-tailor a client's portfolio. You, the client, can have a portfolio strategy that fits your personal objectives, risk tolerance, and time horizon.
Even advisors who don't perform active money management can bring great value. Those who don't can still advise their clients on how to invest their money so as to achieve this.
They Can Help You Protect and Build Your Retirement
Financial advisors are usually more aware of the new products and services in the financial marketplace. These include retirement and protection products such as fixed index annuities and life insurance policies that have accelerated benefit riders.
This knowledge base can help clients to protect and grow their money more prudently and profitably than they probably could otherwise.
Finding the Right Financial Professional for You
Financial advisors can provide many benefits to consumers who need financial advice. If you don't currently have an advisor, you can search for one online in many ways.
Financial Specialty and Knowledge Matter
It's important to find someone with the right specialty for your financial needs.
If you are looking for help with retirement, consider searching for someone who understands retirement challenges. They should also have experience in constructing retirement and income strategies.
Apart from someone's track record and experience, another sign of a financial professional's expertise is designations.
For example, the Certified Financial Planner® designation and the Retirement Income Certified Professional® designation are two high marks of distinction in financial planning circles.
For insurance planning, the Life Underwriter Training Council Fellow (LUTCF) designation is among the creme de la creme in the life insurance industry.
www.cfp.net is the website for the Certified Financial Planner® Board of Standards. You can also learn more about other designations on the website of the American College of Financial Services, a dominant provider of professional education for designation-seekers.
Other Opportunities for Online Research
It's common sense, but a Google search can also help you confirm the credentials of financial professionals you are considering. If you can't find information on someone, then you might find other options. You can specify the type of retirement or financial professional whom you are looking for in your search.
Don't be afraid to shop around if you just starting to look for a financial professional's help. Not everyone offers the same value, and you will want to get someone you feel comfortable with that knows how to address your particular issues.
Need Help with Retirement Guidance?
If you are looking for someone to help answer your retirement questions and concerns, no problem. Many financial professionals are available at JenniferLangFinancialServices.com to assist you. Contact us today!