Fundamentals of Financial Planning

The Financial Planning Process

The process is simple: 1.) Gather data; 2.) Analyze the data; 3.) Develop and Present Financial Planning Recommendations; 4.) Implement Financial Plan Recommendations; and lastly, 5.) Monitor the Plan.

Data needs to be collected.

  • A list of family members, their age(s), health, education, income, financial competence, and any special situations.
  • The current insurance portfolio. What polices are in effect, what does your employer provide? Any Long-Term Care contracts, Life Insurance, or Disability policies in effect?
  • Banking and investment information is needed. Do you have an IRA, SEP, SIMPLE, or 403(b)? Any investment accounts?
  • Taxes – all income, gift, and trust returns for the last five years if available.
  • Retirement and Employee Benefits – Social Security Statements, Employer-Sponsored retirement plans are all needed.
  • Estate Planning – All wills, Durable Powers of Attorney for healthcare decisions, all advance medical directives and any trust documents.
  • All personal financial statements if available. A list of debts and loans. If unavailable, your CPA or Financial Planner can prepare them for you.

Qualitative Goals need to be determined.

  • Education Goals
  • Retirement Goals
  • Employment Goals
  • Savings Goals
  • Risk Tolerance
  • Charitable Goals
  • General attitude towards spending