Americans With Advisors Save Twice as Much for Retirement, Study Finds

By Maurie Backman Published Sep 9, 8:53AM EDT

Key Points

You shouldn’t plan to retire on Social Security alone.
You’ll need savings to maintain the lifestyle you’re used to.
A financial advisor can help you invest wisely for the future and establish a savings goal to work toward.
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Americans With Advisors Save Twice as Much for Retirement, Study Finds — © ferrantraite / Getty Images

There are many American retirees today who get all of their income from Social Security. Unfortunately, people in that situation don’t tend to be very financially stable.

The average Social Security recipient today collects a little more than $2,000 a month. That’s not a lot of money to live on. So it’s important to do what you can to build a retirement nest egg.

However, you don’t have to go through the process of saving for retirement alone. You may find that working with a financial advisor is your ticket to attaining financial security in retirement and being able to enjoy your golden years to the fullest.

The data is encouraging

A recent Northwestern Mutual survey found that people who work with a financial advisor expect to be able to retire two years earlier than those who are handling their money solo. Not only that, but people who use a financial advisor have saved twice as much money for retirement than those who don’t use an advisor: $132,000 versus $62,000.

It’s also worth noting that 75% of people who work with a financial advisor think they’ll be prepared to retire, compared to 45% without an advisor.

How can a financial advisor help you retire securely?

You may be wondering exactly how a financial advisor can help you retire the way you deserve to. For one thing, a financial advisor can help you come up with an appropriate Social Security filing strategy based on your needs and life expectancy.

Even though you should not plan to retire on Social Security alone, those benefits may play a big role in your future finances. So it’s definitely important to claim them at the right time. A financial advisor can help you weigh the pros and cons of different filing options to land on the right one.

A financial advisor can also help you figure out how much retirement savings you might need, keeping in mind factors like your:

Personal goals and expenses
Risk tolerance
Inflation

Just as importantly, an advisor can help you set a budget and manage your income in a manner that leads to consistent retirement plan contributions.

Of course, a financial advisor can’t force you to contribute a certain amount of money toward retirement each month. That has to come from you. However, one thing a financial advisor can do is help you invest your nest egg in a manner that’s likely to lead to steady growth without taking on too much risk.

Also, don’t forget that a financial advisor can help you manage your portfolio once you’re in retirement. That could mean rebalancing regularly, assessing your investments for risk, and making sure your nest egg is generating the income you need it to.

It pays to give a financial advisor a chance

If you’ve been on the fence about hiring a financial advisor, before you decide not to, talk to a few professionals in your area and see what they have to say. You may find that working with an advisor spells the difference between meeting your retirement goals or falling short.

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About the Author Maurie Backman →

Maurie Backman has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. Her work has appeared on sites that include The Motley Fool, USA Today, U.S. News & World Report, and CNN Underscored.