What are the Benefits of a Financial Plan


Marshalling Resources and Clarifying Your Financial Life

Your Financial Plan will consider many aspects of your life, for example:

  • Your income and cash flow
  • Your assets such as real estate, business and investment portfolio
  • Your life and property/casualty insurance
  • Your liabilities such as mortgage loans and other obligations
  • Your tax situation
  • Your legacy such as family and charitable desires and concerns
  • Your future plans for items such as retirement, major expenditures, asset sales, inheritances, etc.

The Plan will forecast your cash flows, your income including pensions and social security and the value of your assets and liabilities over time. You may also want to consider other "what if" scenarios as well allowing you to understand your alternatives and pick your best options.

The Plan should be considered a living document. This means that once your plan has been established, it should be revisited annually to determine what may have changed from the original Plan. This will keep your plan up to date and will identify any adjustments that may need to be made to keep you on track.

An additional benefit of the Planning process is that it can demonstrate where you may need additional professional help to solve certain issues. For example, the Plan has the ability to model tax loss carry forwards, your business, deductions and other income tax issues.  The Planning process may also point out your needs for Estate and Trust documents. These items likely require the expertise of a qualified tax professional and/or an estate and trust attorney. The Plan can help you isolate these issues for you and help you communicate this information.

By now you can probably see how the Financial Plan makes sense of your financial life.  It does this by documenting and monetizing your desires and concerns.  The Plan should support your overall wealth management goals and prepare you to implement next steps.