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Do I Really Need a Comprehensive Financial Plan?

Do I Really Need a Comprehensive Financial Plan?

19 May 2022

Can you recall the last time you sat down to mindfully organize and calculate your personal finances? If you are like most people, you prefer winging it simply because it’s easier. Lacking financial literacy is common; there is no shame in this.

The solution is to seek professional support from a wealth manager specializing in comprehensive financial planning. With your advisor, you can craft a comprehensive financial plan to save you time, effort, worry, money, and missing out on a comfortable retirement. 

As humans, we like to stick to what we know. 

 

Let’s us apply what we know, which is saving you time and money, through the McGervey Method™.

 

You stick to what you know and do best—leave your goal-based plan in our hands as dedicated investment advisors.

Though it is tempting to move forward without a plan, it is not in your financial interests. It’s our responsibility as a fiduciary firm to look out for you first. That’s why we recommend a comprehensive financial plan created with the assistance of a fee-only CERTIFIED FINANCIAL PLANNER Professional (CFP®), whether you work with us or not.  

Here’s why.

The Basics of Comprehensive Financial Plans

There is a common misconception that comprehensive financial plans are set in stone. Though some financial planners will create a roadmap for financial success on a client’s behalf and neglect to change it, CFP®s worth their keep are willing to pivot as necessary. 

Building wealth in bull and bear markets requires ongoing analysis, intellectual flexibility, and active investment management.  

Choose a fiduciary CFP® with a duty of care to you, the client, and you will receive the benefits of timely investment decisions made by a proven professional in accordance with your input. The best of them are responsive to market dynamics and requests from clients, providing highly flexible financial planning that proves successful across the long haul.

Written financial plans are a documented analysis of an individual’s finances at a specific time. Alternatively, generalized financial planning is advice provided by a financial advisor to help clients identify and achieve financial goals.  

Financial planning is necessary for a sound and comprehensive financial plan. The best plans are characterized by detailed analysis and deliverables to help clients reach retirement or another financial goal according to the selected timeline.

Keep in mind that business owners specifically require a comprehensive financial plan. We have financial tips for you too.

The Clear Financial Picture Everyone Deserves

Financial planning reviews your unique financial picture to establish a metaphorical roadmap that guides you toward your goals. Your comprehensive financial plan will account for everything from your current earnings to your savings and investments to tax implications and the necessary amount to reach your goals following your desired timeline.  

Most people meet with a fee-only fiduciary CFP® to create a financial plan that paves a path toward retirement. However, suppose you have another financial goal: saving for your child’s college education, buying a house, leaving an inheritance, or spearheading a successful business. In that case, you will also benefit from a comprehensive financial plan.   

Comprehensive Financial Planning Extends Beyond Investing

Most people assume financial planning is centered on investing and saving money. Though investing is central to most financial plans, it is only one piece of the overarching puzzle. Financial plans start with income and retirement planning. Your income will eventually shift away from your salary earned at work to Social Security payments and forms of passive income.  

The challenge lies in strategically taking distributions from your income sources so your money outlasts you. Fail to establish a comprehensive financial plan, and there is a chance that the worst possible outcome will unfold: running out of money during retirement and being forced to return to work. 

The Tax Component of Financial Plans

Comprehensive financial planning also includes tax planning. Our advisors are here to review your current tax burden and mitigate it moving forward so you do not pay a single penny more than necessary to state and federal governments. We are willing to work with your accountant and other financial professionals in your network to ensure your tax burden is as light as possible.  

Tax strategies within financial planning extend far beyond estate planning that reduces the tax burden on your family when inheriting savings, investments, and assets. Tax mitigation starts the moment you begin earning income. 

From the analysis of pre-tax retirement contributions to distributions from retirement accounts after leaving the workforce, after-tax streams of income, and beyond, our advisors have the subtleties of tax mitigation down to a science. We apply our tax expertise to the idiosyncrasies of your unique financial situation to help you achieve your financial goals on time or before your targeted date.

Estate and Legacy Planning Within a Financial Plan

A financial plan is not comprehensive unless it includes estate and legacy planning. Your estate and legacy plan encompasses the legal component of your finances, including your will, trust, and other estate planning legal tools. 

Estate planning aims to facilitate the transfer of your hard-earned money and other assets to loved ones and good causes without an arguably punitive tax burden or obtrusive and preventable bureaucratic interference. Learn how to get started by using this estate planning checklist.

Financial Planning Based on Facts Rather than Guesswork

Comprehensive financial planning is rooted in data analysis instead of instinct and speculation. Though financial planning requires prognostication to a certain extent, the best advisors are eager to admit they cannot predict the future. 

Rather, the aim is to strategically position clients’ hard-earned money into the appropriate securities and investment vehicles for financial success, leading to a timely and rewarding retirement.  

Our CFP®s take pride in creating financial plans based on accurate data rather than assumptions. We invest the time and effort necessary to collect and analyze data in the context of individualized financial planning. This analysis empowers us to make data-driven decisions that lead to decisive action today and as market dynamics change in the months, years, and decades ahead.  

Instead of leaving plans in place after creation, we maintain an open mind and evaluate all potential opportunities to enhance each client’s unique plan for future financial success. Our team constantly evaluates new investing opportunities, reassesses the strategic components of clients’ financial plans, and considers alternate paths to reach targeted aims.  

This is the active investment management every client needs and deserves.  

How Do I Start a Comprehensive Financial Plan?

Reach out to a wealth management firm that specializes in comprehensive financial planning. Building a transparent, professional relationship grounded in sound financial planning should last well beyond the initial stages. It should be considered a strategic partnership with the common goal of securing the full spectrum of your financial life.

At McGervey Wealth Management, we are here to strategically invest your money through full-cycle investing—not designed to be set and then forgotten. We look forward to supporting your unique financial needs.

 

Ready to create a path to financial peace of mind? Call an Akron-Canton OH financial advisor to support your long-term financial success. 

 

Call us today for a no-obligation appointment to have an honest conversation about your financial goals.

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More About the Author: Matthew McGervey, CFP®, MBA

As a CERTIFIED FINANCIAL PLANNER™ professional, Matthew has a broad knowledge of personal financial planning strategies and solutions.