Mature Life Features

Cecil Scaglione, Editor

Posts Tagged ‘financial planner

Financial Planning Akin to Root Canal

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By Cecil Scaglione

Mature Life Features

If you think preparing and maintaining a financial plan is akin to a visiting your dentist, you’re in a big club.

More than 80 percent of Americans hate or only do financial planning because they have to, like cleaning the garage or the toilet bowl, according to a nationwide NFO Research Inc. survey of 1,000 adults aged 19 – 64.

More than half said they don’t feel confident about making good decisions, don’t understand numbers, or are afraid of what they might find if they examine their financial picture too closely.

“It’s hard to feel confident in your ability to manage your finances if you feel like you don’t make enough money,” said Randy Schuldt, a vice- president with IHate-FinancialPlanning.com, a website designed for people who dread financial planning. The survey was conducted by his firm.

Rather than shut down your economic engine, the company suggested you prepare for you financial future just as you would for a cross-country trip.

Just as you wouldn’t leave on such a trip without a road map, you should prepare and maintain a household budget to track daily spending, saving, and investing, and a financial plan to map out long-term financial goals.

Fifty percent of Americans maintain a household budget and only slightly more balance their checkbooks monthly, according to survey results, and more than 65 percent have never worked with a financial planner.

We hire plumbers, electricians, and auto mechanics to handle complicated repair problems but avoid seeing a financial professional to help with one of the most important aspects of our lives –  finances, according to company spokepeople..

Survey figures present a rather bleak picture. Almost 20 percent of the respondents said they never learned how to do financial planning. Less than 5 percent actually took a course or seminar on the subject. The remainder said they learned about financial planning on their own by watching their parents or television, reading books and magazine articles, or from a friend or sibling.

Thirty percent said their parents never talked to them about money.

The survey revealed it often takes a serious life-altering event, such as a job-loss, having a baby, winning a lottery, or sending the children to college, to make people focus on their finances.

The purpose of financial planning, Holman said, is to reduce the stress in such situations.

While many Americans try to save money, they sabotage their efforts with too much debt and not investing in the best financial vehicles.

Almost a quarter of the survey respondents admitted they had too much credit-card debt, 14 percent do not have any money saved anywhere, and 12 percent are not putting anything away for retirement despite the fact that more than half said they’ll need at least $1 million for retirement.

Less than half contribute to a retirement account at work and 30 percent save money, whether its in coins or dollars or in a cookie jar at home — about the same amount that invest in stocks.

To curb the amount spent, nine out of 10 respondents said they clip coupons, 70 percent eat leftovers, and 60 percent buy items only when they’re on sale. What do they spend their money on? The number one financial pleasure is eating out, followed by spending too much on holiday gifts, and splurging on clothes.

Mature Life Features, Copyright 2003

 

 

Written by Cecil Scaglione

November 28, 2011 at 12:05 am

Posted in Finance

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Inept Financial Planner as Bad as a Crooked One

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By Cecil Scaglione         

Mature Life Features

Financial losses perpetrated by crooked, self-serving, and inept financial planners have been estimated to total at least $1 billion a year in this country. Retirees account for the bulk of this loss.

That means it’s up to you to establish, maintain and monitor open lines of communication with the financial experts with whom you deal, including your tax preparer, stock broker, financial planner, accountant, insurance agent, and attorney.

It’s unfair to assume any of these are out to defraud you. It’s also unrealistic to expect any or all of them to be professional or prescient enough to assure you of the safest and surest financial road to the future. In other words, you have to assume responsibility for your own wealth and welfare.

Most retirement income is commonly likened to a three-legged stool. One leg is Social Security.Another is made of company pensions. The third comprises personal savings and investments. You have the most control over the last. And this is where you need the most help from financial planners. Unfortunately, there is no sure way to seek and select such consultants who are competentand trustworthy.

Referrals, therefore, are probably your best source. Check with your colleagues and neighbors and relatives and then do your own background checks of the names  you get. You can simplify your search if you know your retirement needs. The rule of thumb is that you need an amount equal to 70 percent of your pre-retirement earnings to maintain your standard of living when you no longer are working.

Social Security has been paying an average of 40 percent of pre-retirement income. If your employer’s pension plan pays out an almost similar amount, then you should have little to worry about, other than the fact that the fund could dry up. If your company plan falls short — or if you have no retirement income coming from employers because you may have changed jobs a few times — you have to establish alternative sources of income to supplement your anticipated Social Security checks. There are many investment avenues to explore: individual retirement accounts, 401(k) programs, profit-sharing plans, annuities, the stock market, investment clubs, mutual funds, insurance trusts, and real estate, to mention a few.

If you haven’t taken any fiscal steps on your own, you’re part of a large club. More than half of Americans have not put aside any money for retirement. At the same time, the need for more retirement income is growing because the average worker now lives about two decades after retiring. So, armed with the knowledge of what you’ll need if you quit working at 65, you can then search for a financial planner who understands your needs and your situation and is willing to listen to your thinking to help position yourself in the most secure financial niche available.

You’ll also recognize more readily whether he or she is more interested in generating transactions (and commissions) for himself or herself, is a sleazy scam artist, or just plain lazy.  It’s never too late to begin this process. Even if you’re already retired. There’s plenty of free information and advice on the Internet to get you started.

Mature Life Features, Copyright 2002

Written by Cecil Scaglione

September 7, 2011 at 12:05 am