Are you a comprehensive planner when it comes to your finances? If you’re like most Americans, the answer is probably no. According to a 2013 study from the Certified Financial Planner Board of Standards, only 19 percent of Americans could be categorized as comprehensive planners.1
The study defined “comprehensive planners” as individuals who plan for every aspect of their financial lives, from retirement to college savings, risk management to estate planning and more. The study found that the remaining 81 percent of Americans either planned only for specific individual goals, such as retirement, or did no financial planning at all.
Not sure which group you’re in? If you don’t have a financial plan, you’re likely in the latter group. If you do have a plan, however, it’s possible that it isn’t comprehensive. A comprehensive plan may be more helpful to you because it could offer insight and transparency into all aspects of your financial life.
Below are a few questions to ask yourself about your financial plan. If you can’t answer yes to these questions, now may be the right time to meet with your financial professional and develop a comprehensive financial plan.
What are your top priorities and biggest risks?
Perhaps the most helpful aspect of a comprehensive financial plan is that it allows you to clarify and prioritize your goals and objectives. Many people have multiple financial goals. For example, you may want to fund your retirement while you also save for your child’s education and perhaps pursue other financial goals. How do you know which goal should be the top priority?
A comprehensive financial plan should provide a complete analysis of all your goals so you can see which requires the most effort and which is most important to your financial future. You can then use that information to guide your decision-making and your savings efforts.
Your comprehensive plan should also identify potential risks that could stand in the way of you achieving your goals. If you are aware of these risks in advance, you can take action to minimize the threat and protect your financial future.
How are your goals related to each other? And how do your efforts to reach one goal impact other goals?
Another helpful aspect of a comprehensive financial plan is that it allows you to see how your goals interact with one another and how the various areas of your financial life are intertwined. Again, that information can help you make more informed decisions.
For example, you may want to save as much as possible for your child’s education to protect them from the burden of student loan debt. However, doing so may limit your ability to save for retirement. Your comprehensive plan can show you how those two goals are related to each other, so you can decide how to allocate savings to each objective.
What will happen to your estate after you pass away?
While it may not be pleasant to think about, your death should be part of your financial planning efforts. You may have a spouse or other dependents who rely on you for financial support. Even if you don’t have dependents, you probably want to leave some kind of legacy for your loved ones.
The estate planning component of your comprehensive plan should help you protect your wishes and ensure that your assets are distributed according to your objectives. You could use a wide range of financial tools, such as a will, trusts, life insurance and more, to provide for your loved ones.
Are you ready to develop your comprehensive financial plan? Let’s talk about it. Contact us at Legacy Retirement Services. We can help you identify your needs and create a strategy. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
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Terry L. Tyler