As a child you pulled the blanket over your head to ward off the monsters. Your financial future is no monster - if you think ahead - but some people still insist on pulling up their blanket. Here are some sobering numbers and ways to get planning while you still have time.
For its " Fear of Financial Planning Consumer Study ," Harris Interactive surveyed 783 adults with at least $100,000 in investable assets. Some of the results scare any financial planner:
- 38% of respondents do not intend to create a financial plan.
- 32% expect to create a financial plan within the next five years and 12% say a plan will take them longer.
- Those older than 55 are more likely to not create a financial plan.
The percentage uninterested in creating a financial plan goes against the grain of the legitimate financial fears of those same respondents.
The following groups all worry about another financial crisis; among their other top concerns:
- Retirees and pre-retirees (retiring in five to 10 years): Unmanageable health-care costs and savings lasting through retirement;
- Generation X (born between the early 1960s and the early 1980s): Savings lasting through retirement and retiring with a desired lifestyle;
- Generation Y/Millennials (born between the early 1980s and early in this century): Financing their children's education and savings lasting through retirement.
- High net worth individuals (at least $250,000 in investible assets): Unmanageable health-care costs and financing their children's education.
Yet nearly a third of respondents say they "just haven't gotten around to" making a plan. One in five claim they don't need a plan; about one in six don't know how to create one, say they don't need a "formal" plan or find the whole idea "overwhelming"; and almost one in 10 say they lack enough assets to bother with a plan.
Among those not working with a financial planner, two in five respondents say they do their own financial planning and one in five balks at advisors' fees. Small numbers of respondents fear trusting advisors or shy away from market volatility or negative market news or perceptions.
Not all is gloomy in the survey: Nearly two thirds of respondents - especially retirees - work with a financial planner. Respondents cite the most common reason as taking "advantage of (advisors') expertise and insight to support decision making."
No matter your income or time of life, a financial plan acts as a great roadmap to guide you toward a comfortable retirement and other goals. Time matters: The sooner you start reducing debt and investing your money, the better off you are. If older than 55, you must still consider retirement and estate planning.
Regarding sources of advice, three out of five respondents turn to financial advisors. Almost two in five rely on websites or media and more than a quarter rely on family members or friends for advice.
Any advice beats none, of course. When your financial future rides on whipsawing markets, you must find the most professional and expert advice available.
Whatever you do, don't hide. Face your financial fears.
Follow AdviceIQ on Twitter at @adviceiq.
Claire Emory, CFP, CFA, RIA, owns and operatesClarity Financial Planning LLCin Arlington, Va.
AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialtyrank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.