If you’ve ever thought about your money, you’ve participated in financial planning.
Financial planning is simply taking a look at your finances. It can be informal—just evaluating your spending, or it can be formal—hiring a financial planner to help with your retirement goals.
You may think you’ve got your finances under control on your own, but there are a few reasons to consider working with a financial planner:
1. See your possibilities.
A financial plan should be focused on your goals. But most people:
A: Don’t have clear goals, or B: Have goals that aren’t connected to reality.
I get it—it’s tough for someone in their 30’s or 40’s to articulate what age they want to retire and with how much money. If asked, most people want to retire “early.” Is this even possible?
Going through a financial plan allows you to see what your true possibilities are. Instead of coming up with random goals that may never work, you can see what’s achievable based on your situation. Once you know what’s possible, you can develop realistic and meaningful goals.
2. Have a frame of reference for financial decisions.
There’s no right or wrong way to manage your money. However, there are thousands of financial decisions you’ll have to make in your lifetime. A financial plan gives you the frame of reference to make these important decisions.
Think about these common questions:
- How should I invest?
- Do I need long term care insurance?
- Should I buy an annuity?
- Is a Roth better for me?
You can probably be successful no matter how you answer these questions. But a good frame of reference shows you the effects these decisions have on your overall financial plan.
Do you have a higher success rate by using an annuity? Does a Roth IRA save you in taxes later on? Without these answers, you’re making these important decisions in a vacuum.
3. Provides confidence.
A financial plan is designed to be comprehensive. Financial planners are looking at all kinds of possible scenarios and pitfalls that could derail you. Coming out on the other side should give you confidence in your future.
Even if you had to adjust your goals, or realize you have more work to do, this should still give you peace. Without the planning process, who knows what would happen if you decided to face the future without a plan!
You don’t need to have a complex situation, millions of dollars, or be near retirement to benefit from financial planning. Everyone can find value working with a financial planner.
Schedule an appointment with us today and let our advisors work with you to achieve your financial goals.
