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Who Needs a Financial Plan? Everyone.

Michael Ringler

09/03/2020 — Download

Social Security is a wonderful benefit. Ask anyone who’s retired and they’ll tell you so. But they’ll also tell you it’s hardly enough to live on. So despite the financial demands of raising a family and running a household, you need to find a way to set aside dollars for your retirement on a regular basis. The kind of retirement you’re saving for and how you will get there, as well as other major expenses along the way, like children’s educations, are the subject and substance of your financial plan.

Everyone needs a financial plan. Not only is Social Security no longer sufficient retirement income, we’re also living longer, and the “number” you have in mind for how much you will need in retirement will change based on how long you live. Employer-provided pensions used to provide a helpful supplement to Social Security, but pensions are, for the most part, a thing of the past. All in all, if you’re going to retire comfortably, it’s going to be up to you—and that means planning now, wherever you are in life, and reviewing your plan regularly to ensure it stays relevant and realistic.

Establishing a sound financial plan starts with three main concerns:

  • When you want to retire, that is, your desired retirement age;
  • Your budget in retirement, that is, how much you’ll need;
  • Whether your current plan is sufficient to accommodate the first two concerns—if you currently have a financial plan.

A financial plan is more than just figuring out how much you need to retire. It involves:

  • Budgeting: your income, what you spend and where, and how much you are saving.
  • Your debt: including the best way to pay off student loans and credit cards compared to how much you’re saving.
  • Insurance: your game plan for your family and financial future should you get sick or injured. You might have some coverage provided by your employer, but that is most often insufficient to cover what you would want for your family.
  • Taxes: how your income taxes are done will impact what you have left to spend and save.

A financial plan makes it easier to invest because you know what you’re investing for. Your portfolio is allocated based on where you are in your life in a manner that is most likely to help you achieve your retirement goal. And you don’t have to worry about the short-term swings of the stock market. It’s analogous to a plane trip: If the ride gets a little bumpy, you don’t leap out of the plane. You have confidence in the pilot. He might make some changes to avoid rough air, but you will get to your destination.

The most powerful aspect of a financial plan is that you can review it regularly and change it to ensure it is relevant and current. It should reflect the changes that happen in your life and financial circumstances—and confirm that you are staying on track to your goals.

IMPORTANT DISCLOSURES

The information included in this document is for general, informational purposes only. It does not contain any investment advice and does not address any individual facts and circumstances. As such, it cannot be relied on as providing any investment advice. If you would like investment advice regarding your specific facts and circumstances, please contact a qualified financial advisor.

Any investment involves some degree of risk, and different types of investments involve varying degrees of risk, including loss of principal. It should not be assumed that future performance of any specific investment, strategy or allocation (including those recommended by HBKS® Wealth Advisors) will be profitable or equal the corresponding indicated or intended results or performance level(s). Past performance of any security, indices, strategy or allocation may not be indicative of future results.

The historical and current information as to rules, laws, guidelines or benefits contained in this document is a summary of information obtained from or prepared by other sources. It has not been independently verified, but was obtained from sources believed to be reliable. HBKS® Wealth Advisors does not guarantee the accuracy of this information and does not assume liability for any errors in information obtained from or prepared by these other sources.

HBKS® Wealth Advisors is not a legal or accounting firm, and does not render legal, accounting or tax advice. You should contact an attorney or CPA if you wish to receive legal, accounting or tax advice.


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