What a Real Financial Plan Should Include (It's More Than a Number)
Ask most people what a financial plan is, and you will hear a version of the same answer: it’s a number. The amount you need to retire. A single figure that, once reached, means you are finished.
At The Legacy Foundation, we clearly understand that retirement planning involves a long-term partnership. Many factors impact financial plans and life events drive these critical changes.
1. A clear picture of your cash flow
Everything begins with the honest question of what comes in and what goes out. Not a restrictive budget, but a clear understanding of your cash flow — because that is what determines how much you can direct toward your goals. A plan built without this is a plan built on a guess.
2. Goals that are specific and ranked
"Retire comfortably" is a wish. "Retire at 65 with enough income to keep our home, travel each year, and help with our grandchildren's education" is a goal. Real plans translate vague hopes into specific, time-bound objectives. At The Legacy Foundation we help our clients prioritize their goals and set expectations.
3. An investment strategy built around those goals
Only once the goals are clear does the investment strategy make sense. Short and long-term investment goals should have different investment strategies. The investments serve the plan; the plan does not serve the investments.
4. A tax strategy that runs all year
Taxes are one of the largest expenses most households face over a lifetime, and they are far too important to address only at filing time. A real plan considers which accounts hold which assets, how and when income is recognized, and how today's decisions affect future tax bills. Thoughtful, year-round tax awareness is one of the clearest ways planning earns its keep.
5. An estate and legacy plan
At some point every plan turns outward, toward the people and causes you want to provide for. Estate planning — wills, beneficiary designations, powers of attorney, healthcare directives — ensures that what you have built is passed on the way you intend, with as little burden as possible on those you love. For many of our clients, this is the part that gives the whole plan its meaning.
6. A regular rhythm of review
Finally, review is what turns a document into a true financial plan. Life, markets, and tax laws constantly change, and a plan that isn’t revisited can quickly become outdated. Regular reviews help ensure your strategy stays aligned with your goals, while working with an experienced firm provides the guidance and tools needed to adapt to what’s outside of your control.
Final Thought
As an independent fiduciary firm, we are committed to act in our clients' best interests — and that commitment is most valuable not in the financial plan's first draft, but the partnership that spans over many years.
If your idea of a financial plan has been a single, far-off number, we would be glad to show you what a living plan looks like instead. Curious what a living financial plan looks like for your family? Schedule a conversation with The Legacy Foundation — planning today, protecting tomorrow.
Disclaimer:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Investing in mutual funds involves risk, including possible loss of principal. An investment in Exchange Traded Funds (ETF), structured as a mutual fund or unit investment trust, involves the risk of losing money and should be considered as part of an overall program, not a complete investment program. An investment in ETFs involves additional risks such as not diversified, price volatility, competitive industry pressure, international political and economic developments, possible trading halts, and index tracking errors. Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. No strategy assures success or protects against loss.
