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Building a Financial Strategy for the Lifetime You Want to Live

When creating a financial strategy for clients, a financial professional’s work centers on six critical areas. Below is brief overview of these six areas of concern.

Cash Management

The starting point of any financial plan should be the development of a good working budget. Monthly expenses should always be less than income. In addition to a budget, an emergency fund should be established for unplanned expenses. In most cases, this would be three to six months of expenses; however, in certain cases, nine months of living expenses may be more appropriate.

Retirement Preparation

The average person works forty-plus years, during which time they need to accumulate enough wealth to provide income for the remainder of their life. Early retirement, inconsistent or little to no savings, down markets, etc. - each of these can have a significant impact on the ability to safely and comfortably retire. And, the earlier saving begins, the better the outcome. The job of the financial professional is to develop a retirement strategy to answer the questions: how early can retirement begin, how much needs to be accumulated, and how to best distribute income over the anticipated remaining life time.

Investment Approach

Needs, goals, time horizon, and risk tolerance – no two people are alike. Which is why there are many ways to approach investing. The role of the financial professional is to objectively consider the needs, goals, time horizon, and risk tolerance of the individual in order to craft an appropriate investment strategy.

Risk Management

Risk is an inherent part of life. Risk is managed by transferring it from you to another entity – that’s where insurance steps in. Insurance includes life, health, disability, home, auto, long-term care, and annuities. Questions to ask are: what type of risk do you want to transfer? How much risk do you want to maintain? How much premium are you willing to pay to transfer the risk?

Tax Management

Tax laws are constantly changing. Having a tax professional in your corner can keep you up-to-date on the changes. At younger ages, tax preparation may be fairly straight forward. But significant life changes such as starting a business, receiving an inheritance, or losing a spouse can complicate tax preparation.

Estate Planning

Estate planning is not just for the wealthy - if you have anything of value, you have an estate. How well you prepare today may help determine how well the assets are distributed after you’re gone. In addition to a tax professional, it is best to also have a legal professional in your corner for estate planning purposes.

The amount of information and options available today can be overwhelming. As financial professionals, that’s where we come in. E-mail us for our ‘Lifetime You Want to Live’ e-book or give us a call to schedule a free consultation.

Let us help you build a financial strategy for the lifetime you want to live.

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