Financial Confidence? It's Just Good Planning, Boomers Say

An confident-looking older woman stands outside under a tree with her arms crossed.

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Millions of Baby Boomers are rapidly reaching retirement age in a “silver tsunami” that is placing a renewed focus on how this generation feels about their finances. According to Charles Schwab’s Modern Wealth Survey, 66% of Boomers believe they are in a better position to reach their financial goals than previous generations.

How did this generation find themselves to be so well positioned financially?

A majority of Boomers feel they have a positive relationship with money, which gives this generation a strong financial foundation. In addition, more than 3 in 5 Boomers (63%) are actively investing today, and they overwhelmingly expressed confidence in their investment strategy and ability to reach their financial goals. Boomers attribute this confidence to having more ways to build wealth (68%), more investment options (64%), and more accessibility to investing in general (58%). Financial confidence doesn’t always come easily, but we hear common themes from those who share it.

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1. Do your research and seek professional advice

In today’s world, there is an overwhelming amount of information online, and it can be difficult to discern what financial advice is trustworthy. While “finfluencers” may be gaining traction among younger generations, Boomers are most likely to use a financial professional/institution (such as a financial adviser, investment firm, or accountant) for financial advice. They noted the top reasons for trusting these professional sources are their proven track record of success (53%) and the proper financial certifications and credentials (45%).

A financial advis e r can help you navigate the complex world of investing, but it’s important to carefully determine which professional resource is right for you and best meets your needs. Are you seeking help with budgeting and savings goals or more complex guidance around financial planning, wealth management and tax planning? If you are seeking assistance with financial decisions, you will want to understand the different designations you encounter and create a list of questions to ask a potential adviser to find the right fit.

2. Have a financial plan

When it comes to managing your finances and preparing for retirement, the quote “if you fail to plan, you plan to fail” could not be more true. A financial plan is essentially a roadmap to attain your goals. It is easier and more affordable to get a financial plan today than it’s ever been before, whether you get started with a do-it-yourself digital financial plan or have an in-depth conversation with a professional.

Boomers noted that once they created a financial plan, they felt more in control of their finances and in turn more confident they would reach their financial goals.

While more than one-third of Boomers have taken the necessary steps to document their financial plan (38%), another third (34%) have only thought about their financial goals. It’s important that you discuss your financial goals and ensure you have a plan in place for your situation. Many firms, including Schwab, offer free online tools and education and employ Certified Financial Planners® that you can meet with on a one-time or ongoing basis.

3. Have an investment strategy

An investment strategy goes hand-in-hand with a financial plan. In fact, Schwab’s first investing principle is to establish a financial plan based on your goals, as these will help guide how conservative or aggressive your strategy should be. Are you saving for a dream trip, a second home, or a child’s education? Knowing your goals will help you determine if you need a strategy focused on growth or stability.

The next step is to build a diversified portfolio based on both your capacity to take on and tolerate risk. While most firms offer you the option to invest on your own, consulting a financial adviser can help simplify the process of identifying the products and services that best meet your needs.

4. Stay engaged

Having a clear vision of your financial goals is important, but equally crucial is ensuring you stay on track. Asset classes perform differently, and it’s nearly impossible to predict which ones will perform best in a given year. That’s why regularly reviewing how your investments are performing and how your assets are allocated is important. The market’s fluctuations can shift your portfolio’s balance, so periodic adjustments may be necessary. Saving for retirement is one of the most crucial goals for many investors, so it’s important to make time for ongoing reviews to ensure your strategy aligns with your evolving goals and financial circumstances.

Remember, growth is not always linear, and even during times of market uncertainty it is important to keep your eyes on the prize. This is a great time to be an investor, especially as more people recognize that investing at any stage of life is about taking ownership of your financial life and achieving your financial dreams and goals.

Investing involves risk, including loss of principal.

Schwab is not responsible for the content on www.kiplinger.com. Please note that Schwab does not endorse these sites or the products and services you might find there.

Diversification strategies do not ensure a profit and do not protect against losses in declining markets.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve. 1224-D1A5

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Joe Vietri has been with Charles Schwab for more than 25 years. In his current role, he leads Schwab's branch network, managing more than 2,000 employees in more than 300 branches throughout the country.