If you’re going to enjoy a comfortable retirement, you need to know, among other things, how much money you’ll need. And you may have a much better chance of knowing if you get professional help.
Consider these findings from a 2021 study by Dalbar, a financial services market research firm:
Investors who worked with a financial advisor were three times more likely to estimate how much they would have saved for retirement than do-it-yourself investors.
More than two-thirds of investors with a financial advisor were satisfied with how much they had saved for retirement, compared to about 27% of do-it-yourself investors.
How do financial professionals help their clients in this way?
First, consider the question of determining how much money will be needed for retirement. It is not always easy for people to estimate this amount. But financial professionals can help clients like you reach that number by exploring your hopes and goals. How long do you plan to work? What lifestyle do you hope to enjoy in retirement? Where would you like to live? How much would you like to travel? Are you open to pursuing income opportunities such as consulting or part-time work?
Next comes the other key question: How much money will be available for retirement? This big question leads to many others: How much do you need to save and invest each year until you retire? What kind of investment return will you need to reach your retirement income goals? What level of risk are you willing to take to achieve that return? What is the role of other sources of income such as Social Security or any pension you may have?
Having a financial professional help you get a clear picture of your retirement income picture can certainly be reassuring. But there may be other reasons why “going it alone” as an investor might not be desirable.
For example, when financial markets are down, as was the case for much of 2022, some investors make decisions based on short-term volatility, such as selling investments to “cut their losses,” even though these same investments still have a solid business. fundamentals and good growth prospects. But if you work with a financial professional, you may decide to stick with these investments, especially if they’re still right for your long-term strategy. Other times, of course, the advice may be different, but it will always be advice based on your goals, needs and time horizon.
Also, if you’re investing on your own, you may always be measuring your results against major market indexes like the S&P 500 or the Dow Jones Industrial Average. But in reality, your portfolio should contain a wide range of investments, some of which are not contained in these indexes, so you may not be adequately evaluating your performance. A financial professional can help you develop your own more meaningful benchmarks that can show the progress you’re actually making toward your goals.
In some areas of life, going it alone can be exciting, but when it comes to investing for your future, you can benefit from some company along the way.
Jennifer Barrett (AAMS) is a local financial advisor at Edward Jones.
225-612-0413 | jennifer.barrett@edwardjones.com
Edward Jones. SIPC member.
Edward Jones, its employees and financial advisors are not estate planners and cannot provide tax or legal advice. You should consult your estate planning attorney or qualified tax advisor regarding your situation.
This article was written by Edward Jones for your local Edward Jones Financial Advisor.
