August 25, 2020

You’ve heard about an estate plan and you might have even referenced an elder care plan, but do you know how your financial plan fits in with the rest of these documents and strategies? Your financial plan is somewhat distinct, although it is definitely linked to your overall estate plan. Your financial plan is a document that takes a comprehensive look at your financial picture and helps you to determine how you’ll achieve specific financial goals.

You’ll need to think about your wishes, wants and needs and also understand your overall comfort level with risk when creating your own financial plan. More often than not a person who is confronting their financial plan for the very first time will use financial planning software, such as an analysis showing the impacts of taking money out of your different retirement accounts and how to invest aggressively to save for retirement.

A detailed cash flow analysis or net worth statement can also help you to get a 30,000 ft view of some aspects of your financial life that you should remain focused on immediately. As part of your overall financial plan, this helps you see when you need to make changes to existing strategies and how to adapt when challenges or unexpected windfalls like inheritances come your way.

You’ll also need to document all investible assets that could be used to achieve your individual goals as well as your current and anticipated spending and your detailed liabilities. Once you know where you stand financially, you’ll be able to craft a plan that is in line with your unique goals and priorities.