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If you’re struggling to get your finances in order, welcome to the club. Opening a brokerage account with built-in financial planning services can help relieve the stress and confusion behind the process.
You’re Not Alone
A recent study from Allianz Life Insurance Co. found that nearly half of Americans, or 47%, don’t have a written financial plan. The statistic reflects a similar trend toward a lack of financial knowledge.
The study reported that many people who are contributing to 401(k)s and IRAs are not sure what comes next. Over half, or 53%, believe that simply having a retirement account will be enough. Concerningly, only 45% say they know how to turn their savings into retirement income.
And a majority of participants, or 59%, say they don’t know what else they should be doing aside from retirement accounts to prepare for life after work.
Allianz surveyed 1,000 respondents age 25 and over with annual household incomes of at least $50,000 (single), $75,000 (married or partnered), or investable assets of $150,000 or more.
The survey indicated a lack of financial literacy, especially on Social Security, that may lead to stress and mistakes down the road.
Of those surveyed, 53% believe that Social Security will account for a “major source” of their retirement income. Not quite. According to the Social Security Administration, on average, the benefit accounts for 40% of a person’s annual pre-retirement earnings.
More than half, or 55%, of respondents also believe that 65 is the retirement age to collect Social Security benefits. While Americans can opt in to benefits starting at age 62, the full retirement age for many is 67, depending on date of birth. Collecting early can result in reduced payments.
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Confusion around retirement only helps to mystify the process, compounding feelings of helplessness. Online financial brokers are easily accessible and often provide built-in financial planning services.
Forbes Advisor’s pick for the best online brokerage for advisory services is Merrill Edge. With its best-in-class advisory services and in-person assistance, it’s a great option for beginner investors, as well as anyone looking to get financial advice.
Investors can sign up for a complimentary, personalized strategy with a financial advisor to get their investing goals down on paper.
For other options, here are Forbes Advisor’s picks for the best online brokerages.
Fidelity, for example, is another brokerage with in-house financial experts, a wealth of educational materials and transparent fees for services rendered.
Bottom Line
Many Americans feel lost when it comes to financial planning for retirement. Finance professionals can help, and services can often be free or low-cost through online brokerages.