While leads for insurance agents may be a primary focus in the industry, professionals are also often involved in helping their customers prepare themselves financially. And what they're doing is paying off, as a new study suggests individuals who make a financial plan tend to do better than those who do not.
The Consumer Federation of America and Certified Planner Board of Standards recently released a report about families and what they have done to help make ends meet given the economy's rough shape. Of the more than 1,500 households surveyed, nearly four in every 10 said they live paycheck to paycheck, suggesting that they've had a difficult time moneywise. Additionally, 30 percent said they were in good fiscal shape, and one-third believe they'll be able to retire by 65.
But these numbers were considerably different when financial preparation was brought into the equation. Approximately half of planners said that they were on track to retire when they had initially intended to. This response wasn't nearly as common among those who didn't make a comprehensive plan, as just 32 percent said they were doing well financially despite not planning ahead.
Similar results were also found when planners and non-planners were asked about their living conditions. By a margin of 48 percent to 22 percent, planners were more likely to describe their standard of living as comfortable. Furthermore, planners were as likely to indicate as such if they made between $50,000 and $99,999 per year as non-planners who were making more than $100,000 per year.
Stephen Brobeck, executive director for CFA, noted that taking precautions almost always leads to positive results.
"Our survey clearly shows that having a personal financial plan helps both rich and poor achieve their financial goals," said Brobeck. "Having a financial plan increases one's confidence and effectiveness in managing, borrowing and saving money."
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