The economy is improving and inflation is under control, so why do so many people still feel financial pressure and worry about a secure future?Goldman Sachs Retirement Survey and New research from insights reportIn 2024, planning proves to be the missing link for many households. The study found that creating a written (digital) financial plan can have a significant positive impact. Let’s explore.
Financial planning is the missing link to true financial security
Most people work, earn money, and make financial decisions that affect how they allocate their income in the short term. These may be considered the first link in a series of financial planning actions. Many people also have future goals such as retirement, children, and travel, which are the end of the chain.
There is a plan between the beginning and the end of the chain. It’s a simple habit that has big positive results.
A plan connects what is happening in your life today with what you want to happen in the future.
Why plans work
Many people are enthusiastic about saving, but without a systematic plan, they often fail to reach their goals.
A well-structured financial plan will lead to transformative improvements across various aspects of your personal finances, providing you with a more secure and confident financial future. Here’s how planning makes a tangible difference.
Planning results in greater wealth and higher savings value
The data in the report is overwhelming. Having a personalized retirement plan was the second most important factor (after education level) associated with increasing retirement savings. For both active and retired respondents, those who had a personalized plan when preparing for retirement had more savings. Below is some data.
- 80% of people who have a personal plan are on track or ahead of plan with their savings (compared to 39% of people who don’t have a personal plan)
- People with a plan are 62% more likely to increase their savings each year (vs. 29% without a plan)
- 52% of people with a plan have more than $200,000 in savings (compared to 23% of those without a plan)
Additionally, research from Charles Schwab shows that financial planners accumulate significantly more wealth, with planners saving an average of $1.9 million for retirement, compared to an average of $788,000 for non-planners. It turned out to be dollars.
Planning promotes disciplined saving and allows individuals to build significant wealth over time.
Planning increases financial confidence
Every day, we hear from Boldin Planner users that they can plan their results with confidence.
“So far, the comprehensive nature of the software has been amazing. It takes every aspect of financial planning into account and allows you to test different scenarios and feel confident in your plan.”
“This is a tool that rivals and even exceeds tools that were previously only accessible to professionals at a fraction of the cost. It will give DIY planners confidence in their plans. Thank you!”
“It’s comprehensive and makes planning very easy. The recommendations and scenario features are very useful. It’s less stressful and gives me more confidence that I’m not missing anything important.”
And the Goldman Sachs Retirement Study provides data that supports these experiences. People who have a financial plan that works for them are much more confident in achieving their financial goals. Specifically, 80% of people with a plan express confidence in their retirement prospects, compared to just 42% of those without a plan.
Another study by Fidelity supports this, noting that individuals who engage in financial planning are twice as likely to report high levels of financial well-being.
This increased confidence comes from having a clear roadmap to help navigate both predictable and unexpected financial events, allowing individuals to make informed decisions.
Improved financial results
People who plan are much more likely to experience consistent improvements in their financial situation. According to Goldman Sachs data, 62% of people with a financial plan report year-over-year financial improvement, compared to just 32% of those without a plan.
Vanguard research supports this, pointing out that people planning for retirement are more likely to set and achieve incremental financial goals, allowing for steady financial progress year after year. .
Planning helps individuals make better decisions and adapt to changing circumstances.
the ability to better address competing financial priorities;
Managing multiple financial goals at the same time, such as saving for retirement, paying off debt, and paying for education can be overwhelming. However, people who do financial planning are better equipped to deal with these competing priorities. Goldman Sachs points out that 43% of planners are comfortable managing multiple financial goals, compared to just 35% of non-planners.
Additionally, the CFP Committee found that planning helps individuals allocate resources more efficiently and avoid neglecting important financial goals.
early retirement
Planning not only increases your savings but also helps you retire early. According to a study by Goldman Sachs, 61% of people without a plan expect to delay retirement because they don’t have enough savings.
But people who plan are more likely to reach their retirement goals faster. A TIAA study found that people with a retirement plan are 45% more likely to retire early than those without a plan, thanks to disciplined savings and investment habits.
likely to improve financially compared to the previous year
One of the most important benefits of having a plan is that it promotes continued financial growth. People who have a financial plan are more likely to experience positive financial results each year. According to a Goldman Sachs study, 62% of planners report year-over-year financial improvement, compared to just 32% of non-planners.
This consistency is a hallmark of financial planning, as planners regularly review and adjust their strategies to reflect changes in life, market conditions, and evolving goals.
Manage your money more comfortably
Finally, financial planning leads to a greater sense of control and comfort in managing your money. According to Goldman Sachs data, 40% of people with a plan feel comfortable managing their savings and investments, compared to just 16% of people without a plan. .
A Northwestern Mutual study found that planners are three times more likely to feel financially secure because planning reduces the anxiety and uncertainty associated with financial decisions .
Do you have a plan?
The benefits of financial planning go beyond simply increasing your assets. From increased confidence to improved overall financial outcomes, a structured approach to personal finance provides individuals with greater control, security, and long-term success. Planning is the key to overcoming life’s financial complexities and achieving a secure future.
Start (or update) your plan with Boldin Planner.
