What is financial planning?

Financial planning is intangible, a bit difficult to picture.  Perhaps the best way to imagine it is to consider the issues we address.  Have you ever worried that you will not have enough money to pay for your kids’ college?  Have you ever been unpleasantly startled by a large tax bill?  Have you ever wished you and your spouse could manage your money in a cohesive way?  Money can cause stress.  Good financial planning results in a reduction of such stress.  Here are some questions we help our clients answer:

Detailed description of financial planning

Comprehensive financial planning addresses the areas of concern described below, and how one area affects another.  For example, how can you use your tax rate to select the most appropriate retirement savings account?  The client and advisor work together to select the specific areas to focus on such as:

Business Planning:

We provide consulting services for clients who currently operate their own business, are considering starting a business, or are planning for an exit from their current business. Under this type of engagement, we work with you to assess your current situation, identify your objectives, and develop a plan aimed at achieving your goals.

Cash Flow and Debt Management:

We will conduct a review of your income and expenses to determine your current surplus or deficit.  We work with you to develop a prioritized action plan for putting your surplus to work, or turning your deficit into a surplus.  Advice may also be provided on which debts to pay off first or how much to devote to an emergency savings fund.

College (paying and saving for):

Saving for college involves an assessment of how much you will need, how much to save regularly, and where to save it.  Paying for college involves an analysis of the most efficient use of resources including savings, tax credits, cash flows, student work, and loans. If appropriate, we will review your larger financial picture as it relates to eligibility for financial aid or contributions from other sources (such as grandparents). We also help with financial aid.  Since the FAFSA (Free Application for Federal Student Aid) uses the previous two years of tax returns,  you should consider your tax situation starting when your student is a high school freshman!

Employee Benefits Optimization:

We will provide review and analysis as to whether you, as an employee, are taking the maximum advantage possible of your employee benefits. If you are a business owner, we will consider and/or recommend the various benefit programs that can be structured to meet both business and personal retirement goals.

Estate Planning:

We assess your current estate plan:  do you have will(s), powers of attorney, trusts and/or other related documents?   Are they sufficient?  Are you likely to  owe future estate taxes?  If necessary, we recommend ways to create or update your estate plan.  Typically, we recommend that you consult a qualified attorney when you initiate, update, or complete estate planning activities. We can provide you with contact information for attorneys who specialize in estate planning.  At your request, we will participate in meetings or phone calls between you and your attorney.

Financial Goals:

We will help you identify financial goals and develop a plan to reach them. We will identify what you plan to accomplish, what resources you will need to make it happen, how much time you will need to reach the goal, and how much you should budget for your goal.

Insurance:

We review your existing policies to ensure proper coverage for life, health, disability, long-term care, liability, home and automobile.

Investment Analysis:

Investment analysis may involve opening and selecting accounts, reviewing your current investments, developing an asset allocation strategy to meet your financial goals and risk tolerance, providing information on investment vehicles and strategies, or reviewing employee stock options.

Retirement Planning:

We help you plan for retirement whatever your vision:  early retirement?  a second career?  sail around the world?  work until your shoes wear out?  We evaluate how much you are likely to need for retirement, and if you are saving enough and saving appropriately.  If you are near retirement or already retired, we can advise on efficient distribution strategies for your assets.

Risk Management:

A risk management review analyzes your exposure to major financial risks such as premature death, disability, property and casualty loss, or the need for long‐term care.  Advice may be provided on ways to minimize or mitigate such risks through self insuring or purchasing insurance policies.  Typically, we refer insurance needs to outside specialists (as a fee-only advisor, we never receive any commissions or compensation from the sale of products).

Tax Planning:

Tax planning is a look at one of the largest bills you pay, your taxes, in relation to your entire financial picture.  This is different from tax preparation.  While tax preparation uses past information to prepare your tax return; tax planning looks at the future to manage future tax bills.  We develop strategies to utilize your resources in a tax-efficient manner.  Before initiating any tax planning strategy, we recommend that you consult with a qualified tax professional.  We can provide you with contact information for tax accountants or attorneys.  If requested, we will participate in meetings or phone calls between you and your tax professional.