Reasons to have a Financial Plan
Your financial objectives may include: being able to send your kids to college, planning for a secure retirement, purchasing a new home or refinancing an existing one, starting a new business and minimizing your tax exposure or a combination of a few of these. No matter what your goals and objectives are, developing a comprehensive financial road map is one of the most important steps you can take toward achieving them. While your personal financial situation is unique, here are some reasons to establish a solid financial plan.
Americans are living longer, healthier and more active lives than ever before. Many will spend as much time retired as they did in the work force. If you do not want to outlive your money and have the retirement you’ve always dreamed of, then having a financial road map to get you there is the perfect first step.
The cost of higher education continues to out pace inflation at this time when the need for a higher education has never been more evident. The right financial plan will help prepare you for those costs.
Because of Americans living longer, they are now required to take more responsibility for their own healthcare. What this means is you’ll be choosing your health coverage options from a plan menu and needing to fund part or all of your own coverage.
Estate taxes may consume as much as 55% of a person’s estate within 90 days of his or her death. Establishing a sound financial plan can preserve a legacy for your heirs by helping shield your assets from estate taxes.
A financial plan provides a snap shot of your current financial situation from your net worth to your cash flow and debt management, education funding, retirement planning and portfolio management. This snap shot might show shortfalls in your plan that you can correct now to get you back on track.
A financial plan will help you look into your future, 5, 10 or 15 years to retirement. You will see what will be needed in the future to meet your goals for your retirement, college education, estate preservation and portfolio management.
A financial plan can help you protect your family, business interests and investment portfolio by helping you determine amounts and types of insurance that would be right for you.
A financial plan will help keep you in control of your professional centers of influence including lawyers, accountants and other specialists.
As your needs, goals, dreams and financial situation change over time, a plan gives you the flexibility to change your financial strategy to meet any new objectives. For a plan to be truly effective, you and your financial consultant must weigh several factors, including your goals, objectives and time frames, your personal investment philosophy, and your tolerance for risk.
Remember, when you are with your financial consultant, it’s not an event, but a process