A Financial Coach Can Help Improve Your Retirement Outlook

They Can Get Your Retirement Plans on Track

Blonde Coach woman with a man debating, coaching about work

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Retirement confidence levels are critically low across the board these days. The Center for Retirement Research estimates that nearly half of all households are at risk to not be able to continue to maintain their same comfortable lifestyle during retirement.

Problems related to debt are a major obstacle on the retirement savings journey. Saving in a 401(k) plan or IRA can be a challenge for people living paycheck to paycheck. As a result, it can be easy to assume retirement may not be an option if you are struggling with cash flow and debt issues.

The good news is that retirement can be an attainable goal if you can take some basic steps to improve your personal finances. One way to reduce financial stress and take control of your financial future is to create and follow a financial life plan. A personal spending plan is often at the core of this financial plan. Unfortunately, we don’t always make rational decisions with our money and our financial behaviors are influenced by a variety of factors such as our money-related thoughts, beliefs, and cognitive biases.

The growing financial planning profession is relatively young and is well-positioned to help move the retirement preparedness needle in a more positive direction. The problem is that for most Americans with money management and debt concerns, access to a financial planning professional may not seem like a viable option. That is because the traditional financial planning process usually focuses on topics related to retirement, insurance, estate, income taxes, and investments. 

Financial coaching has the potential to fill this void and provide much-needed education, guidance, and empowerment for people seeking ways to achieve some sense of financial independence. The key to a successful financial coaching relationship is trust and honesty. Persistence is also important. If you are working with a financial coach it is important to consistently meet with your coach. Financial Finesse, a workplace financial wellness provider, found that employees who were repeat users of their financial wellness programs had higher overall financial wellness, were better prepared for retirement, managed their cash flow more effectively and were more comfortable with their debt levels. 

What Is a Financial Coach?

The primary goal of a financial coach is to educate clients on the basics of personal finance and, using a collaborative approach, help these clients create an action plan that aligns the client’s financial resources with their values and goals. The financial coach then attempts to motivate and empower clients to take responsibility for their own financial decisions. The financial coach also provides support for the ongoing learning and growth process. Financial coaches attempt to turn financial knowledge into action and serve as accountability partners throughout the process.

How Can a Financial Coach Improve Your Retirement Outlook?

Reducing debt and creating a personal spending plan can become the fuel for future retirement savings. Financial coaches can help provide the guidance needed to identify how to prioritize financial goals. An effective financial coach meets their clients where they are in life and does not have a hidden sales agenda or potential conflicts of interest. When seeking a financial coach you should always seek out an unbiased professional.

It is important to recognize that coaching, guidance, and mentoring from a financial coach differs significantly from traditional financial advice. As a result, it is the responsibility of a financial coach to help empower you to take action and make more confident financial decisions. Financial coaches measure their success based on the behavioral change of their clients.

Here are some important questions to ask a potential financial coach:

  • Are you available by phone, email, video chat, or in-person meetings?
  • What professional designations do you have? Examples to look for include the Certified Financial Planner designation, CPA credential, Chartered Financial Consultant (ChFC), or Accredited Financial Counselor (AFC).
  • Is this completely unbiased with no sales pitch?
  • How do you measure success?
  • If services are provided as an employee benefit, is our conversation completely confidential?

If you are seeking a financial coach it is important to verity that your financial coach is truly an unbiased professional and isn’t just trying to use concepts such as "coaching or “financial wellness” to sell you investments, insurance or some other type of products. A real financial coach won’t sell you anything.