Financial Planning Process

Financial Planning Process

  • Determine short-term and long-term financial goals and objectives.

  • Assess current financial status.

  • Evaluate goals and objectives in light of current financial status.

  • Consider options going forward.

  • Implement the plan.

  • Review and update.

Components of Financial Planning Process

  • Cash flow analysis.

  • Debt reduction [if applicable]

  • Risk management issues.

    • List risks, determine if risks are insurable, discuss insurance coverage options, decided if the risk to insure or self-insure.

      • [Does not include liability or property-casualty insurance risks.]

  • Pre-retirement planning.

    • List expected retirement age and retirement income objective.

    • Determine expected sources of retirement income.

    • Project sources of income’s ability to maintain long-term retirement income objectives.

  • Post-retirement planning.

    • Review current retirement income and expenses.

    • Project possible new expenses.

    • Evaluate the retirement income sources and their ability to maintain retirement objectives.

  • Evaluate the money management strategy.

    • List money management objectives.

    • Review current asset allocation.

    • Discuss expected return and historical volatility.

    • Assess the strategy’s ability to meet objectives.

  • Determine estate planning objectives.

    • Discuss appropriate estate planning documents. 

      • [Estate plan and documents should be drafted by a qualified estate planning attorney.]

    • Review of beneficiary designations in light of estate planning objectives.

  • Tax Considerations

    • Discuss the impact of taxes on goals and objectives.

    • Consider various tax planning strategies. 

      • [Tax planning and preparation should be done with qualified tax planning accountant.]

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