According to a national poll conducted by CNBC and investing app Acorns, only 1% of Americans hire help to manage their finances. That number goes up with age, but just barely: 2% of those 55-64 do, and 4% of those 65 or older.
Obviously, when you’re young and broke, working with a pro is silly. There’s not much to manage, and you’ve got all the time in the world to learn about investing and build your savings.
Plus, if your investments are primarily mutual funds in a 401(k) plan, you already have professional advice, since the fund managers are already being paid to make the right moves.
But here’s when the amateur approach to money management goes from deft to dumb: When your nest egg reaches the level that little tweaks can make monster differences.
A mistake that costs you millions?
Consider this: If you save $500 a month for 40 years and earn an average annual return of 5%, you’ll end up with nearly $725,000. Double that return to 10%, and you’ll retire with almost $2.7 million.
Two million more: That’s a life-changing difference.
So, if you’re sitting on sizable savings, here’s some simple advice that could change your life: Allow a professional adviser to at least take a look at where you are and what you’re doing.
Even if you don’t hire an adviser permanently, a short, simple and inexpensive review could make a difference.
If a review by an outside expert reveals you’re doing everything right, that clean bill of health will offer peace of mind.
If it reveals you could be making more, the sooner you find out, the better.
How to get help
According to one independent study, people who work with a financial adviser feel more at ease about their finances and can end up with about 15% more money to spend in retirement.
So, getting a review by an objective professional obviously makes sense, especially as you approach retirement. But that begs the question: Who can you trust?
In the past, you’d have to turn to a stranger and take your chances. But that was then.
You fill out a short questionnaire, then get matched with up to three local fiduciary financial advisers, each legally bound to work in your best interests. The process only takes a few minutes, and in many cases you can be connected instantly with an expert for a free retirement consultation.
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