CHICAGO, ILLINOIS–(Marketwired – Aug. 29, 2016) – BMO Wealth Management (U.S.) today released a report, “Your Personal Net Worth Statement,” which examines how Americans balance their decisions between saving, investing, borrowing and spending as they navigate different life stages and plan for their financial goals.

The report showed that for almost a third of American respondents (31 percent), the single most important financial priority is to reduce or eliminate debt.

The BMO report depicts the following financial priorities for Americans:

• Saving more (26 percent)
• Investing effectively and tax efficiently (21 percent)
• Budgeting (14 percent)
• Spending on personal needs or goals (4 percent)

The report also showed that priorities change depending on the age of respondents. Millennials (aged 18-34) are focused on saving to meet shorter term goals such as a down payment to buy a home (30 percent). Meanwhile, the most important financial priority for Boomers (aged 52-70) is to reduce or eliminate debt (35 percent).

“Priorities can shift over time. It is reassuring to see Americans focus on eliminating debt that otherwise could be a hindrance to reaching their financial goals,” said Jason Miller, National Head of Wealth Planning, BMO Wealth Management (U.S.). “Having a financial plan, budgeting and continuously monitoring your financial situation can help ease the stress of the life transitions that you’ll face at each life stage.”

Expect the Unexpected

The report also noted that 42 percent of Americans are concerned about being unprepared and surprised by unexpected expenses.

Americans reported the following unexpected expenditures:

• Paid out of pocket healthcare costs for themselves or family members (44 percent)
• Paid a major bill after an unexpected incident (40 percent)
• Provided financial support for family member (33 percent)
• Had lost income, benefits or savings as a result of job loss (28 percent)

“Significant life events – such as the death of loved ones, a divorce, a major medical issue – can cause people to have a fair degree of anxiety about their financial future,” said Miller. “In addition to helping you create a holistic financial plan, working with a financial professional can help you stay on track should unexpected life events arise. Your advisor can also re-orient your financial strategy to help meet your personal needs and goals.”

BMO offers the following financial planning tips to Americans at various life stages:

New Grads: Putting a plan in place to achieve future goals, such as saving for a down payment for a home or reducing outstanding student debt, is most important. By establishing a budget that focuses on saving and reducing borrowed amounts as opposed to spending on current wants, it may be possible to achieve these goals more quickly. Roth IRAs or regular investment accounts are popular options to meet shorter-term savings goals.

Parents: When gifts are given to children on birthdays and holidays, parents may wish to use this tradition as an opportunity to teach children about the importance of balancing between spending on current wants and the desire for future needs. Parents should also consider life, creditor, critical illness and disability insurance to protect their families in the event the unexpected occurs.

Retirees: Reducing expenses and maintain and establishing a consistent cash flow or income stream in retirement is important to help make accumulated savings last. This is a good time to consider scaling back on financial support paid to younger family members. If your goal in retirement is to travel, build your financial plans with this expectation in mind – including the cost of travel medical insurance.

To view a copy of the full report, please visit: https://www.bmo.com/privatebank/us/insights/newsletters/bmo-wealth-institute

For more information about BMO Wealth Management or to learn more about wealth planning, please visit: https://www.bmoharris.com/main/personal and the new Your Wealth Your Way resource center at www.bmoharris.com/yourwealth.

About BMO Wealth Management

BMO Wealth Management serves mass affluent, high net worth and ultra-high net worth individuals and families with a full suite of wealth management solutions including wealth planning, banking, investment management and trust and estate services. With 35 offices across 12 states and international offices in Canada, Hong Kong, and Singapore, BMO Wealth Management provides guidance and planning advice combined with individualized service and local expertise. As of July 31, 2016, BMO Wealth Management had assets under management of US$48.6billion and assets under administration of US$56.2 billion. BMO Wealth Management is supported by the resources and stability of one of North America’s premier financial services organizations – BMO Financial Group. Visit www.bmowealthmanagement.com.

BMO Private Bank is a brand name used in the United States by BMO Harris Bank N.A. Member FDIC. Not all products and services are available in every state and/or location.

Fiona Yu, Toronto
(416) 867-3996
[email protected]