Only one-third of Americans are focused on long-term financial planning, according to a study by The Guardian Life Insurance Company of America.
However, having a source of income for retirement is one of the top financial priorities for most Americans, the study says, which creates a disconnect between people’s desires and their actions.
In fact, most of the top seven financial priorities named in the survey of nearly 5,000 working Americans over the age of 18 with incomes of $50,000 or more deal with saving or setting financial goals, all of which take long term planning.
The study, "From Concerned to Confident: the Guardian Study of Financial and Emotional Confidence," shows nearly 80 percent of people are stressed, partially because their financial goals and behaviors do not match.
Matthew Bryan, assistant vice president for Guardian Life, says the study points out incremental steps people and their advisors can take to emulate the long-term planners, which will help them gain confidence, lessen stress and improve their financial lives.
“We know money does not buy happiness, but small behavioral changes that are in our control can increase confidence and satisfaction,” Bryan says. “The people we call the ‘confident planners’ in our study are more likely to work with an advisor. The advisor can help the client take toward better planning: save a little more, make a budget, put beneficiaries on documents.”
Education, in particular, is important, he says.
“Advisors should look at how they help educate clients; this can be a value-add for the advisor,” Bryan says.
These steps can decrease the stress that nearly 80 percent of the respondents report feeling. They also reported a lack of financial confidence and less than optimal life satisfaction. “Individuals’ and families’ actions and behaviors are not aligned, and thus are not setting them up for success,” the study says.
Confident planners have a long-term, written financial plan and they understand what is in it, says Bryan. They have healthy attitudes toward money, live within their means, and look for the right advisor to assist in planning, the study says.