financial plan

Remember The Plan, Stan!

You know who stresses less about stock market volatility?  People who have a financial plan.

According to the Goldman Sachs 2024 Retirement Survey and Insights:

  • 40% of people with a financial plan feel comfortable managing their savings and investments, compared to just 16% of those without a plan.
  • 80% of individuals with a financial plan express confidence in their retirement outlook, versus only 42% of those without one.
  • 62% of people with a plan report year-over-year financial improvement, compared to 32% without a plan.

People with a financial plan know that:

  • Their financial success doesn’t depend on the investment returns of a month or a year.
  • Their planner is likely using an average annual return that is lower than he/she thinks they can actually get (in other words, planning conservatively).
  • The person with a plan is reminded by their planner that, even in retirement, you won’t use all of your money at once. Big drops in account balances can be overcome by not over-withdrawing or selling in a panic.
  • The financial plan is usually stress-tested by using a Monte Carlo simulation that includes thousands of real-world past market returns (including recessions and depressions and wars and plagues).

 

Focusing on your plan, your savings amounts, and your spending is the way to keep from doom-scrolling stock market catastrophe news.

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