Financial Planning: What We Help Clients Accomplish
Have you ever wondered what it’s like to have the basics of your financial life “in order”?
What are the things you need to be doing or have done before you can say, “my financial life has a strong starting point”? Well, here is a list of all the basics that we help our clients do, so they can feel in control and find that calm. I’ve broken it out by stages for a visual, but these don’t need to happen in a set order.
Our financial planning process meets everyone exactly where they are, and helps them work to accomplish what they are ready for. Now, this list is very basic and broad sweeping - financial planning is unique to every individual who goes through the process. This is because we all have our own individual past situations, current situations, and future hopeful situations that are constantly changing and evolving. This can lead to people going through these steps at different times, and some not checking all of these things off their list at all.
With all that being said, here is the list of what we aim to help clients accomplish and what all you should have done at some point in your financial journey to make sure you’re in a healthy place financially and overall.
Wealth Accumulation
Know your cash flows - Make sure that you have at least some idea of: how much comes in every month, how much you spend every month, how much you save every month, and what is left over each month.
Have an adequate emergency fund - We recommend at least 3 - 6 months of necessary spending (rent/mortgage, bills, & food expenses).
Know what your goals are! You need to know where you’re going on vacation before you can pack for it. The same is true with your financial life - if you want to retire early, you can’t be packing all your savings into qualified retirement accounts that can’t be accessed before age 55.
Make sure you aren’t in too much debt or have too high of debt payments. We like to see our clients spend no more than 28% of their Gross Income on their mortgage, we also don’t want total debt payments to be higher than 33% of Gross Income.
Business Owners
How to properly structure your business to be most tax efficient (sole proprietorship, LLC, LLC S-Corp, C-Corp)
Setting up the correct retirement accounts (Solo 401(k), SEP IRA, Simple IRA)
Pre-Retirement
Be sufficiently insured.
Life insurance - Ensure that your family can replace at least 50% of your income if you pass, as well as pay off all debt and pay for last expenses(usually 15k)
Disability Insurance - Make sure that you can replace at least 60% of your income in the event you become disabled and can’t work any longer. These policies should be “Own Occupation” policies and not “Any Occupation” for more comprehensive coverage.
Health Insurance - Understand your family’s health and healthcare needs and choose coverage adequately. If relatively healthy or if you typically have high cash reserves, we encourage looking into High Deductible Health Plans, so that we can take advantage of low monthly premiums and the very tax-advantaged HSA account.
Property + Casualty Insurance - Make sure the deductibles on these policies are as high as you can reasonably afford. This helps keep premiums low and allows you to have more cash each month.
Umbrella Policy - If you have sizable amounts of investments in IRAs or Non-Qualified accounts, make sure you have an Umbrella Liability Policy of at least the amount of your net worth. This helps in the event someone were to sue you if they are injured by you or at your property.
Long Term Care Insurance - Make sure you have a plan in place in the event you need help at an older age. This can be through self-insurance with a policy or having a large enough nest egg saved.
Estate Plan - You need: Medical Power of Attorney (POA), Financial POA, a Will, a Trust, and your belongings designated with the trust as the beneficiary. This will allow your assets to pass smoothly and the transition be much smoother for your family in the event of your passing.
Savings & Investing!
Make sure you’re getting the full match in your 401(k) account.
Make sure that all savings are automated - Coming out on the same day of the month consistently so you can act like the money isn’t even there.
Tax Diversified - Make sure you’re using the right tax-advantaged accounts that are correct for your unique situation.
Asset Allocation - Align your asset allocation to match your time horizon and risk tolerance.
Business Owners
How to structure the sale of your business
Building succession plans for your business
Planning for what retirement will look like for you
Retirement
Retirement Income Planning
Social Security Decisions - Figure out when to take versus delay and what the pros and cons of each are related to your specific situation.
Pension Strategy - Assess Sole versus Survivor benefits and how this decision can affect your family in the future.
5-Year Income Plan - Make sure your next 5 years of income in retirement cannot be affected by short-term noise (AKA market volatility).
Health Care in Retirement
Where are you going to find coverage after your employee-sponsored plan but before Medicare starts?
Income planning to reduce open market healthcare costs.
Medicare Planning - Learn when to apply, what type of coverage you’ll need, and how much is it going to cost.
Longevity Planning
Estate Tax Planning
Family Planning Meeting - Make sure your family knows exactly what happens from a financial perspective, in the event of your passing. Helping everyone understand roles and processes, so all they need to worry about is grieving and celebrating your life, instead of what they need to do with your financial situation.
Gifting and Charity - Helping with QCD’s and making sure that your money gets passed exactly how you want it in the most efficient manner.
That is a broad overview of the basics - this is absolutely not a comprehensive list, but a starting point that we make sure all of our clients can accomplish with our help. Depending on the situation, each of these steps can become infinitely more complex and allow for more flexibility depending on the situation. We make sure that as we’re going through this process we always have your values, wishes, and goals in the front of our minds. We believe that someone with all of these boxes checked will have the ability to live a full and happy financial life. This minimizes financial stressors and can allow you to reach a higher level of satisfaction within your day-to-day life - allowing you to set goals and dreams for the future and know exactly what it will take to accomplish them.
If you’re looking to get started or need guidance on your existing journey to financial peace of mind, schedule a free consultation below!
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Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.