Financial Planning Process
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Determine short-term and long-term financial goals and objectives.
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Assess current financial status.
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Evaluate goals and objectives in light of current financial status.
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Consider options going forward.
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Implement the plan.
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Review and update.
Components of Financial Planning Process
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Cash flow analysis.
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Debt reduction [if applicable]
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Risk management issues.
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List risks, determine if risks are insurable, discuss insurance coverage options, decided if the risk to insure or self-insure.
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[Does not include liability or property-casualty insurance risks.]
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Pre-retirement planning.
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List expected retirement age and retirement income objective.
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Determine expected sources of retirement income.
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Project sources of income’s ability to maintain long-term retirement income objectives.
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Post-retirement planning.
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Review current retirement income and expenses.
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Project possible new expenses.
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Evaluate the retirement income sources and their ability to maintain retirement objectives.
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Evaluate the money management strategy.
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List money management objectives.
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Review current asset allocation.
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Discuss expected return and historical volatility.
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Assess the strategy’s ability to meet objectives.
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Determine estate planning objectives.
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Discuss appropriate estate planning documents.
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[Estate plan and documents should be drafted by a qualified estate planning attorney.]
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Review of beneficiary designations in light of estate planning objectives.
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Tax Considerations
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Discuss the impact of taxes on goals and objectives.
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Consider various tax planning strategies.
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[Tax planning and preparation should be done with qualified tax planning accountant.]
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