Americans with advisors feel more ready to retire, finds Northwestern Mutual

Americans who work with financial advisors are expecting to retire earlier and report greater confidence in their financial futures, according to new research by Northwestern Mutual.

Northwestern Mutual's 2024 Planning & Progress Study highlights significant benefits for those with advisors, who expect to retire at age 64 compared to age 66 for those without advisors. Aside from having more in retirement savings, with an average of $132,000 versus $62,000 for those without professional financial guidance, those individuals reportedly felt more assured about their financial goals and anticipate achieving them more quickly.

"Americans who work with a financial advisor have better financial habits, superior outcomes, less anxiety, greater confidence and more time to live the life of their dreams," John Roberts, chief field officer at Northwestern Mutual, said in a statement. "The impact isn't just about bigger numbers on a spreadsheet – it's about more days in retirement and more time enjoying the journey."

According to the research, three-quarters of individuals with advisors believe they will be financially ready to retire, while only 45 percent of those without advisors feel the same. Additionally, 62 percent of those with advisors understand how much they need to save to retire comfortably, compared to 34 percent without advisors.

Focusing on high-net-worth individuals with at least $1 million in investable assets, Northwestern Mutual found those with advisors plan to retire a year earlier, at age 61, and feel more prepared for retirement (92 percent versus 77 percent). They are also more likely to have a will (81 percent versus 50 percent), a debt repayment plan (89 percent versus 67 percent), and a long-term financial plan that considers economic fluctuations (89 percent versus 75 percent).

The study also found younger generations are increasingly seeking financial advice. Millennials, on average, began consulting advisors at age 29 – around the same time they experience major life milestones such as marriage and parenthood – significantly earlier than Gen X (age 38) and Boomers+ (age 49).

The data also show an especially deep impact among Black and African American individuals. Black Americans with advisors expect to retire three years earlier, at age 61, and have nearly three times the retirement savings ($71,000 versus $26,000) compared to those without advisors. They also anticipate paying off college debt five years sooner.

All in all, the survey found financial advisors remain the most trusted source of financial advice for Americans, with 33 favoring advisors compared to 16 percent who preferred family members. Advisors were also chosen eight times more often than online financial influencers or social media sites like Reddit and TikTok.

The study underscores significant demand for financial advice, with seven in ten Americans acknowledging the need for better financial planning. Nearly 29 percent of those without an advisor plan to start working with one or have recently done so.

"Financial advisors and comprehensive financial planning have never been more relevant or in-demand," Roberts said. "In this time of record-high financial anxiety, Americans are proactively seeking out expert advice for peace of mind."