Financial planning is merely a repeatable process that evaluates your current financial situation and seeks to map out a plan to realize the financial priorities that you are committed to achieving. It is repeatable in the sense that this same planning process should be revisited any time there are changes to your current situation, to the goals you’ve set for yourself, or to the assumptions used in your plan.

Each person has his or her own unique financial goals and is generally limited by the resources available for achieving those goals to a certain extent. Having a plan in place allows you to more confidently implement decisions in pursuit of those goals once you’ve had the opportunity to carefully analyze a variety of scenarios that have the potential to impact your future financially. Often times, important financial decisions become virtually irreversible once they’ve been implemented, and this is why financial planning is essential to making informed decisions ahead of time. We most typically encounter this situation as clients prepare for and approach retirement and must decide on pension payouts, 401k plan rollovers, retirement plan withdrawals, and social security benefits.

The importance of starting now cannot be overstated. The financial planning process is one that immediately identifies risks to your well-being and then reorients your financial efforts in a manner that is consistent with your priorities. Whether you choose to engage the services of a professional or just do it yourself, here are the four fundamental steps we want to emphasize when planning:

1. Where Are You Now?
2. Where Do You Want to Be in the Future?
3. How Are You Going to Get There?
4. Contingencies

In our next segment, we’ll cover the “Where Are You Now?” step of the process. In the meantime, please contact Leo if you have questions about engaging the services of a CFP® professional.