Subscribe Feed (RSS)What is Personal Financial Planning?
Expert guidance by professionals for the improved coordination of financial decision making to satisfy life and estate needs. Direction of portfolio (asset/liability) decisions. Fulfillment of portfolio needs through specific product and vendor choices.
Why do I Need Personal Financial Planning?
Financial planning allows you to organize your finances in such a way as to maximize returns on investments, reduce tax liability, achieve appropriate risk management, and ultimately obtain financial peace of mind.
But Can’t I Just Do It Myself?
Perhaps, but will you? Most business people and professionals are finding it increasingly difficult to plan adequately for their personal financial growth and security. Among the most common reasons for their frustrations are:
- Insufficient time
- Too great a number of investment possibilities
- Frequent changes to tax law make it difficult to keep up
- The entwining of employee compensation and benefits
What is Typically Included in a Financial Plan?
The length of the plan is based on the complexity and specifics of each individual situation. The typical plan can be anywhere from 10 pages to 150 pages and includes:
- Cash Flow and Budgeting Analysis
- Capital Management (debt and investment portfolios)
- Estate Planning and Liquidity Analysis
- Income Tax Projections
- Retirement Needs Analysis
- Insurance Needs Assessment
- Future Educational Funding Needs
- Employee Benefit Analysis (coordinate personal holdings)
- Closely-held Business Analysis
What is My Role in the Planning Process?
Your role in the planning process is to provide as clear and concise information to the planner as you can. They should clearly understand your goals, dreams, attitudes, and positions. Your planner may meet with you annually to update this information.
Are Any of the Financial Planning Fees Tax Deductible?
Generally yes. Most expenses for investment and tax planning are deductible as itemized expenses, subject to IRS Section 212.
How Do You Measure the Worth of Financial Planning?
After your situation has been sufficiently analyzed and recommendations have been made, you will be able to compare the cost of the plan to the savings that the plan projects for the future. In the long-term the savings should far exceed the cost of the plan preparation.
Will Personal Financial Planning Make Me Rich?
Unfortunately, there are no get-rich-quick schemes that really work. All the more reason for personal financial planning; it can help you keep more of what you earn and keep your savings working harder. It does this by:
- Productivity of assets are increased
- Providing financial and emotional security for your family
- Broadening asset class structure to increase risk management
- Provides introduction to a broader spectrum of investment opportunities
- Increasing disposable income through tax savings
- Selection of investment strategies are more closely analyzed
- Minimizes the effect of disability, forced retirement, and death
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