Financial planning is the foundation for successful wealth creation. It is an involved process that begins with establishing goals and objectives, which mix short- and long-term priorities like purchasing a home, paying for education and saving for retirement. It also helps to clarify cash flow needs, employee and retirement benefits, estate plans and tax-related issues. We are frequently asked what questions a financial planner should be answering for their clients, and we’ve compiled a list of queries one may find valuable to answer during the planning process.
- What is my financial plan overlooking or not considering? There are many moving parts in our financial lives. A quality financial plan lays everything out in one place, which is helpful in figuring out if there are any missing pieces or areas requiring focus.
- What is the best way to protect my family and myself? A detailed financial plan can help highlight areas that deserve extra attention, such as emergency preparation and insurance.
- How can I plan for taxes now and in retirement? A dollar saved is a dollar earned. A financial plan considers your situation and optimizes activity to ensure you keep what’s yours.
- When should I take my government benefits? This can be a complicated decision based on a wide array of factors. A financial plan can help inform the best course of action.
- How much can I spend and not outlive my money? What is my optimum withdrawal rate? Everyone is different. A personalized financial plan seeks to answer both questions in a way that is unique to your situation.
- What minimum return do I need to reach my long-term financial goals and when should I change my allocation? Knowing this number is great for peace of mind, though we note that it can change.
- Will I have the income I want in retirement, or will I be able to live the lifestyle I want in retirement? We frequently hear that a 4% withdrawal rate on a portfolio is ideal, but individual scenarios inform withdrawal rates above and below that figure.
- How am I doing so far? How frequently should my plan be updated? A financial plan is a living document and should be updated periodically.
- Do I need to make any major lifestyle changes to help me reach my long-term financial goals? The answer to this question depends on individual circumstances. Some folks need no changes or can even spend a little more, while others need to work longer or belt-tighten to achieve their goals.
TPS Wealth Foundations - 9 Questions for Your Financial Planner
Kovitz Investment Group Partners, LLC (“Kovitz”) is an investment adviser registered with the Securities and Exchange Commission. This report should only be considered as a tool in any investment decision and should not be used by itself to make investment decisions. Opinions expressed are only our current opinions or our opinions on the posting date. Any graphs, data, or information in this publication are considered reliably sourced, but no representation is made that it is accurate or complete and should not be relied upon as such. This information is subject to change without notice at any time, based on market and other conditions. Past performance is not indicative of future results, which may vary.
