In general, people who seek financial planning services are forward thinking, conservative, and want to be able to care for the people they love. When financial planning is well done, they have the peace of mind that comes with knowing they can continue to live their chosen lifestyle during their retirement years and will be able to help out loved ones, when necessary.
Financial planning can be done either on your own or with assistance from a professional. You need to know what you can expect from a good financial planning provider. The first order of business is to understand the difference between a service provider with a valid certification in the field who is capable of providing sound fiduciary advice and one who is simply a talented sales person.
Financial Planning: What Is Involved?
The financial planning process includes:
The ability to understand your goals, i.e. knowing when and how you will use the money available to you. Once you have this understanding, then an action plan with concrete steps must be developed.
A financial adviser, or planner, must gather data about your personal and financial life in order to give advice that will allow you to reach your goals. This information is used to help you learn how and when your goals will be accomplished by projecting it.
What Is Carried Out By A Good Financial Planner?
You will gain advice from a good financial planner in the following areas:
- How you need to change the way you handle your finances.
- How much of your income must be saved.
- Which types of accounts for retirement are best in your case.
- The mortgage type that is best for you.
- How much and what kinds of insurance you need, including disability, long-term care, and life insurance as well as health, casualty, and property insurance decisions.
- The size of emergency fund you need.
- How your tax situation can be improved.
- Over a given time frame, the required rate of return to reach your goals.
- Whether or not you should pay off your home.
- What risk level for investments is appropriate within your account types.
In addition, to these services, tax planning and estate planning is also provided by many financial planners.