The Case for Financial Planning

As life gets more complex, so do our finances and a comprehensive financial plan can help in reaching your financial goals. Between our children, our retirement, large purchases and vacation travel, it is easy for you to feel pulled in many financial directions. What once appeared to be a clear financial path becomes a more complicated journey with lots of twists and turns. So to keep moving forward, we suggest you get a good map - in the form of a comprehensive financial plan. Consider allowing a CB&T Wealth Management & Trust Officer to assist you. It is also important to routinely update this plan.

Drawing Up Your Plan

First, creating a financial plan is about developing a realistic and informed perspective on how you can put all your financial resources to their best use. The process starts by examining and articulating your goals (some that you've already thought about, and some that may not be obvious), and then sorting out your priorities. This can be an excellent opportunity for you to step back, rethink and agree on what's most important to you. We can help you put those thoughts down on paper.

Second, a successful financial plan is holistic. It looks at all the interrelated parts of your financial life - income, expenses, investments, debt, retirement planning, the role of insurance in risk management, income-tax liability, estate planning needs and desires - to make sure they're all working in sync. This is essential, because if you don't have a handle on how much money is coming in and going out every month, it's next to impossible to know how much you can save. If you don't have a savings plan, you won't be able to manage your most important goals like buying that bigger home, paying for your children's education or funding a comfortable retirement. And if you don't have adequate insurance, you may not be able to protect these savings in the face of an unexpected event, like illness or a job loss. All these areas are important. 

Finally, a good financial plan will include a series of concrete recommendations to help you achieve the goals that you have identified and prioritized. Without this component, your experience remains an academic exercise: interesting, perhaps, but not that useful. The goal of a financial plan, after all, is to make your goals a reality. Allow us to help you document all this.

What a Financial Plan Includes

A financial plan may include all or some of the following parts:

  • A personal net worth statement to provide a snapshot of what you own and what you owe. This will help you know exactly where you stand, and also give you a benchmark against which you can measure your progress. It is important to document and discuss this routinely.
  • A look at your cash flow so you can get a grasp on how much money comes in and goes out every year, and understand if it's likely to be sustainable in the long term. This is the foundation for your budget (including identifying what's fixed and what's discretionary). It could also form the basis of a debt management plan, if one is necessary. 
  • A retirement plan specifying how much you should save each year to have a good chance of achieving the lifestyle you hope to maintain. This includes a recommendation on how to potentially maximize your Social Security benefit (individually and as a couple), and can also incorporate any other pension funds you might receive. 
  • An analysis of how your current investment portfolio aligns with your long-term goals. Your CB&T Wealth Management Consultant can recommend appropriate adjustments based on your goals, resources, risk profile and time frame. 
  • A plan for education funding based on your resources, timing and aspirations.
  • A review of your employee benefits, including equity compensation planning.
  • A review of your insurance coverage. The key here is to make sure you have the right types and amounts to cover your most significant risks.
  • Planning for the special needs of a child, parent or other dependent.
  • Recommendations for creating or updating your estate plan, including charitable giving and legacy planning. Your CB&T Wealth Management Consultant won't offer tax or legal advice, nor will he or she create or prepare legal documents associated with such plans, but these conversations can help lay down the foundation for your work with an estate-planning attorney.

What You Can Expect

A financial plan generally follows a six-step process, designed to keep all the pieces on track as you progress from your initial consultation to eventual implementation as follow-up. This process includes:

  1. Agreeing how you'll work together and setting expectations. At this point it's important to ask lots of questions so that you'll understand exactly what you can expect in terms of deliverables, cost and time frame.

  2. Gathering information and setting goals. Once you've set the ground rules, your financial planner will start the process of obtaining a full understanding of your resources, obligations and expectations. At the same time, your planner will delve into your goals, time horizon and risk tolerance. This is your chance to make your wishes clear, so that your plan will truly reflect your values and priorities.

  3. Evaluating your financial status and creating a strategy. Once you've provided your input, your planner with craft a preliminary plan, based on all of the information listed in step two.

  4. Understanding recommendations and possible alternatives. Upon being presented with the preliminary plan, your goal is to understand your options and make choices.

  5. The rubber hits the road. You and your team have spent a considerable amount of time gathering data, examining priorities, looking at what's realistic and making choices. Now it's time to put your plan in motion. Your CB&T Wealth Management Consultant will be fully involved in this implementation phase, helping you select products and accounts to help achieve your goals. Note that the implementation of the plan may result in some professional fees to attorneys and CPAs as well as other fees based on the types of products and services you select. At this point you will also begin to work with other professionals, including an accountant, attorney or insurance agent.

  6. Monitoring your progress. It's essential that you and your planning team continue to monitor your progress routinely and make adjustments as your goals, priorities and time frame evolve.

Many people think a financial plan is only for the wealthy, but we would strongly disagree with that assessment. A financial plan can be invaluable to anyone who wants to make thoughtful decisions about their money - even as their goals and priorities evolve. In fact, in today's extraordinarily complicated world, it could be the one guide you need most.

We are happy to help you in getting started. Please give us a call at 757-6300 or come by our new Wealth Management & Trust facility at 1711 Lake Success to get started with your financial plan.