Comprehensive Financial Planning Defined
Financial planning is not the same as comprehensive financial planning. Regardless of your level of wealth, age, or other unique factors, you need and deserve professional, comprehensive planning. However, if you are like most people, you are not exactly sure what comprehensive financial planning really means.
An Explanation of Comprehensive Financial Planning
Comprehensive financial planning extends beyond merely managing investments on behalf of a client. The best financial planning accounts for retirement planning, paying debt, saving for a child’s college education, and plenty more. A comprehensive financial plan is a highly detailed roadmap for one’s personal finances.
The goal of creating a financial plan is to seize control of one’s financial situation to reach financial aims in the short term and also in the years and decades ahead.
Resist the temptation to perform financial planning independently, lean on a professional for guidance, and you will be that much more likely to reach your financial goals. In particular, it will help to have the assistance of a CERTIFIED FINANCIAL PLANNER™ Professional. To be more specific, it is in your interest to obtain assistance from a fee-only, fiduciary CERTIFIED FINANCIAL PLANNER™ Professional.
A financial planner who receives a flat fee as opposed to a commission for upselling specific financial products is much more likely to steer you in the right direction. Such a fiduciary owes you a duty of care similar to that which attorneys provide to clients. This duty of care obligates the planner to guide your financial interest.
The best financial advisors help clients create and modify financial plans that build wealth when the stock market and economy are at peaks, troughs, and in between the extremes of the business cycle. Choose a professional willing to create a comprehensive financial plan based on the detailed financial modeling of your unique situation, and your financial plan for the future will be uniquely yours.
Don’t settle for a mere projection of your finances. You deserve detailed financial planning across the life of the relationship with your professional financial partner. This is highlighted by active investment management, strategic pivots, and ongoing adjustments based on your specific life milestones, preferences, and even the dynamics of the domestic and global economies.
A Holistic Approach
Your comprehensive financial plan should be characterized by an all-encompassing, holistic approach in which your CFP® Professional considers myriad factors. Your unique level of debt, projected earnings, current savings, existing financial nest egg, and other nuances of your financial situation must be accounted for. Your unique financial plan for the future will be incomplete unless each component of your financial life is accounted for.
Choose a planner willing to analyze the individual components of your finances to develop a truly comprehensive plan. You’ll receive an accurate roadmap for financial success instead of a vague projection that doesn’t account for the specifics of your finances. A truly holistic approach to financial planning accounts for more than savings and investments that help you progress toward your target retirement date.
Comprehensive financial planning should also include an analysis of your debts and a strategic approach to satisfying those debts on time so the focus can shift toward asset accumulation and retirement. The best CERTIFIED FINANCIAL PLANNER™ Professional will help clients establish detailed plans for debt repayment by attacking high-interest debt first, prioritizing debt with low balances, or paying the minimum toward the debt with an aggressive strategy that focuses on maximizing investment returns to outpace interest accumulated on financial obligations.
Your comprehensive financial plans should also include your personal cash flow statement. Though this analysis does not have to delve deep into the nuances of your budgeting, it should account for where your earnings go. Your personal cash flow statement reveals the amount of money you earn and how that money is spent, saved, or invested, ultimately ensuring you have enough money available to reach your targeted financial goals.
The most comprehensive financial plans extend to insurance planning. If you do not have life insurance or other forms of insurance, you are running the risk that all of your hard work has been in vain. Insurance is necessary to safeguard the money you have worked so hard to obtain.
Though most people have health insurance, auto insurance, and homeowners’ or renters’ insurance, some do not have disability and life insurance. Maintain an open mind, consider the merits of life insurance and disability insurance, and you will have the financial windfall you need should you become disabled, incapacitated, or suffer another injury that prevents you from working.
Keep in mind that workers’ compensation insurance is only applicable to injuries causally related to work. You need disability insurance in the event of a disability that renders you unable to work. Furthermore, life insurance is an essential component of comprehensive financial planning as it provides a financial lifeline to your dependents if you pass away before retirement.
Retirement and Investment Planning
The primary aim of financial planning is to establish a roadmap to financial success across posterity. Long-term financial success takes the shape of a comfortable retirement. Our CERTIFIED FINANCIAL PLANNER™ Professional can guide you toward enjoyable golden years and ensure you outlive your money.
Investment planning is integral to retirement planning which extends beyond the basics:
- Roth individual retirement accounts (IRAs)
- 401(k) plans
- Solo 401(k),
- SEP IRA
- SIMPLE IRA
There are plenty of investment vehicles available to help you progress toward enjoying life’s niceties during retirement in your 60s or even sooner.
Our planner will provide the information and guidance you need about investing strategies, diversification, risk tolerance, and tax mitigation. Taxable brokerage accounts combined with an IRA, a 401(k), real estate ownership, and other investment vehicles constitute a diversified investment portfolio that builds wealth during bear and bull markets, keeping you on your target retirement date.
Start your financial planning process or get a second opinion on what you’ve been using as your guide.
At McGervey, you can expect:
- Custom comprehensive financial plans for individuals, families, retirees, and business owners
- An outcome-based plan and list of progress points and strategies to get you from where you are today to where you want to be to achieve your goals
- The preservation of your wealth as well as growing it
- Staying informed and educated, so you feel comfortable with your strategies and progress towards your goals
- Staying invested for the long haul to reap the advantage of the power of compounding interest