Time To Review Your Plan

Creating a financial plan is a lot of work. Reviewing one is just an occasional chore but with wonderful benefits. Complex and unsure financial environments like those today may cause you to wonder how well your plan is holding up. What if these volatile environments worsen? What if dependable investment rates of return are only 5% for the foreseeable future? Has the new tax law benefited you? Are you sure? Has something changed in your life since you last reviewed your planning? There may be some additional concern about a family member, some uncertain health news, or considerations about changing options available to you in your qualified plans at work. All these things trigger a review.

Think of a financial plan as a road map you would use to lay out your vacation trip. A financial plan marks where you are now, where you want to go and what you want to do along the way, the best route to get there, and how fast you want to get there.

What goes into a plan review will depend on what you want it to accomplish. A focused review could hone in on a single area, such as estate planning, funding a college education, or an insurance needs analysis. Usually, changes in one area of life bring unintended consequences to others. So, most reviews should be comprehensive.

A review starts with the complete and accurate gathering of facts about your financial life. If you don’t know exactly where you are on your financial map, you won’t be able to chart a route to your destinations. If we have done planning for you in the past, we will start with the milestones projected in your last plan. If we manage your assets, we will provide the asset balances and cost bases of all investments automatically. You will just need to update us on facts of which we are unaware. A brief, easy to use data update form will be mailed to you to begin the process.

Any financial review should re-articulate personal goals that require financial strategies. These will come both from the questionnaire and in conversations with your advisor. These goals are the destinations on your road map. They affect the route and how fast you want to travel. They may have changed since our last examine all assumptions made in previous plans, to see if they are still appropriate today.

Once your financial data is clarified, your goals identified or confirmed, and all assumptions are reconsidered, we will develop and recommend specific strategies and objectives to meet your needs. This is the route on the map. The route may involve a change to your investment plan, newly improved estate planning tools or some new tax strategies. Our recommendations will be customized for your needs, resources and abilities. The plan might say you need to accumulate X additional dollars for retirement and reconfirm the route that fits your risk tolerance.

A review will balance your various goals and financial resources. You may need to consider alternative strategies for the same goal. You may not reach your destination as soon as you’d hoped. A particular goal may not appear realistic and may need to be modified. You may have to trade off some goals for other, more attainable, goals.

A review will inventory resources for emergencies – the financial equivalent of a spare tire, extra belts and hoses, flares and a flashlight. What if you lose your job or become disabled? These financial setbacks/delays and detours on our trip can ruin a well-laid-out plan. Resources might include a larger emergency fund and the right amount of long term health care.

The cost of your plan review will depend on the amount of work needed. Big changes require more time. Often we can complete our review in one to four hours at our normal rates… a low price for restored peace of mind.

Ultimately, good financial planning should be clear, realistic, achievable and inspirational. It’s less about numbers than what those numbers can do for you. It also needs to be monitored and flexible. Life has a way of changing the best of plans. If one stretch of the route or a goal becomes unrealistic, your plan should be capable altered. Give us a call and we’ll talk about it.