New Census Data Reinforces the Need for Financial Planning (especially for Millennials)
As the rest of the country continues to age, the Millennial population continues to grow in several states. According to new data from the US Census Bureau, North Dakota, Texas, Alaska and Utah continue to be the states with the lowest median age (US Census Bureau, 2017). The new data reinforces the need for Millennials to plan for themselves and count on a long life.
Before the creation of Social Security, retirement was not a concept as it is perceived today. For many older Baby Boomers, the idea of retirement was to work for one company for thirty years and retire with a comfortable pension to enjoy your final fifteen to twenty years of life. Working for one company for thirty years is a rarity today. In prime working years between the ages of 18 and 48, the average baby boomer has eleven to twelve jobs. (Bureau of Labor Statistics, 2015).
Millennials need to have a paradigm shift in the way that they approach retirement. Retirement should not be thought of as something that is just for old people. Retirement needs to be thought of like the idea of gaining financial independence. That is having enough money to pay your expenses without having to worry about getting another paycheck. And it does not have to be when you get in your sixties.
From a money standpoint, you can buy financial independence for about ten to twenty times your current income. How much you need depends on your lifestyle; where you want to live and how frugal or extravagant you want to live. Making your mountain of money last is something that takes planning and that is where Millennials need help.
Social media and the worldwide web is a great help to everyone. You can Google or Bing anything. The ease of using social media has given some people the confidence to do all their financial planning on their own. How is that going to work out? Is everything you read on the internet true and accurate? Try this the next time you are looking up financial information, and you find a website or blog that has financial information that interests you. Look the author up on LinkedIn to see their background. What is their experience?
In a recent Harris Poll of over 2,200 Millennials (ages 18-34), only 22.25% use a financial planner. However, there were some astounding differences in between the financial progress of those who use a financial planner and those who do not. 77% of those who hired a financial professional have a retirement plan compared to only 46% of those who do their own financial planning. Of the do-it-yourselfers, only19% have a long-term plan compared to 63% of Millennials who use a financial professional have a long-term plan. When it comes to life insurance, do-it-yourselfers are far behind too. Only 46% of do-it-yourselfers have life insurance compared 63% of those who use a financial planner who do have life insurance.
No matter what stage you are at, hiring a financial professional is a good move to help solidify your future.
Look at it this way. If you went to college, you probably remember one of the most significant services offered was tutoring. If you were having trouble in class, you could make an appointment to get help. Finances are similar, except working with a financial professional goes much further. Imagine that someone wanted to learn your profession. Could they gain the knowledge that you need in your business by looking everything up on the internet? Or would it be easier and less time consuming to go through a formal program of study for your profession?
Financial planning is no different. You can look everything you need to know on the internet. However, where do you look, what do you need to know and how long will it take? Hiring a financial professional can make a significant difference in your future.
Posted by: Van Richards
Van is the founder of Advice4Retirement and Advice4LifeInsurance you can contact him at van@advice4retirement.com Follow on Twitter @VanRichards or Facebook at https://www.facebook.com/Advice4Retirement/ and https://www.facebook.com/advice4lifeinsurance/
Article References
Bureau of Labor Statistics. (2015). Number of jobs held, labor market activity, and earnings growth among the youngest baby boomers: Results from a longitudinal survey. [News release]. Retrieved from https://www.bls.gov/news.release/pdf/nlsoy.pdf
Mseka, A. (2017, April). Consumers with advisors more financially prepared and confident than do it yourselfers. NAIFA Advisor Today. Retrieved from http://www.advisortoday.com/2017/06/19/consumers-with-advisors-more-financially-prepared-and-confident-than-do-it-yourselfers/
United States Census Bureau. (2017). The nation’s older population is still growing, Census Bureau Reports [News release]. Retrieved from https://www.census.gov/newsroom/press-releases/2017/cb17-100.html