What does financial planning mean to you? Most draw a parallel between financial planning and managing investments. We often hear folks say “my broker and I have done some financial planning, and my portfolio is up 10% this year.” From our point of view, this misses the point.

Have you ever planned a driving trip without bringing a map? Of course not! Before you reach for your map, though, you first must decide where you want to go.

Financial planning is a seven-step process that helps you establish when and where you want to go and what you need to do to get there, putting the necessary things in place to help you reach your destination, and ensuring that your stay is a pleasant one once you arrive.

Step 1. Establish the Relationship

Here, we explain the services we provide and discuss the process of planning and documentation. We will also clarify your responsibilities as a client, and our responsibilities as your planner. This will include a discussion about how and by whom Everhart will be compensated. Furthermore, we will discuss the scope of the client/planner engagement, and agree on how decisions will be made.

Step 2. Gather client data and discuss your goals and expectations

Here, we obtain information about your financial resources and obligations through a lengthy interview and by gathering the necessary documents. This interview helps us define your personal and financial goals, needs, and priorities, as well as investigate your values, preferences, financial outlook, and desired results as they relate to these financial goals.

Step 3: Clarify your present financial status and Step 4: Identify opportunities and areas of concern

Here, we analyze your information in an effort to assess your current situation (cash flow, net worth, tax projections, etc.). We will also identify any problem areas or opportunities with respect to your:

• Capital needs
• Risk management needs and coverage
• Investments
• Taxation
• Retirement planning
• Employee benefits
• Estate planning
• Special needs (adult dependant needs, education needs, needs of those that are disabled,etc.)

Step 5. Develop and present your financial plan

Now, it’s time to develop and prepare a financial plan that is tailored to meet your goals and objectives, values, temperament, and risk tolerance, while providing projections and recommendations. We present the plan to you and work to ensure that the plan meets your goals and objectives.
 
Step 6. Implement your financial plan

If you choose, we will assist you in implementing the recommendations that we have discussed. This may involve coordinating contacts with other professionals, such as accountants, insurance agents, and attorneys.

Step 7. Monitor your financial plan

Following the presentation of your plan, and the implementation of the recommendations therein, we must monitor and evaluate whether your plan is helping you progress toward your goals. We will contact you to review the progress of the plan periodically and make adjustments to the recommendations required to help you achieve your goals.

These reviews will include:

• A discussion about changes in your personal circumstances and how they might affect your goals.
• A review and evaluation of the impact of changing tax laws and economic circumstances.
• A review of your life circumstances and an adjustment of the recommendations if needed as those circumstances change through life events, such as birth, illness, marriage, retirement, etc.

These are some of the important questions that can be answered through the financial planning process:

How much do I need to save for retirement? How will I pay for healthcare in retirement?

Will I be able to maintain the lifestyle that I’ve always dreamed of in retirement?

Is my company retirement plan adequately diversified?

After I max-out my company retirement plan, should I invest in mutual funds, stocks, bonds, or real estate?  Which is really the best?

What sort of mortgage is appropriate (15 year, 30 year, fixed, variable, balloon, 5/25, 7/23, etc)?

How much should I put down when I purchase a home?

Should I make extra mortgage payments?

Is my portfolio invested in accordance with my goals? Is it adequately diversified? Are the expenses that I pay to investment managers appropriate?

Do I need an estate plan? If so, does it consist of a simple will only, or should I have a living will, powers of attorney or other instruments?

Will my assets pass to whom I wish at my death, and will it occur with little cost and effort?

What is the appropriate number of withholding allowances for me to claim on my W-4?

Should I buy or lease a car? Should I turn it in at the end of the lease or buy out the lease?  Should I buy a new or used car, put cash down or not, choose cash-back or a lower interest rate?

Do I need life insurance? If so, how much do I need, and what type makes the most sense?

Are my home and vehicles adequately insured, and am I paying appropriate premiums?

In some cases, you may feel that you already have some of the answers to these questions. However, an incorrect answer to any of the above questions may cost you thousands of dollars and hours of lost sleep. The experts at Everhart can help you develop a written plan to address your goals and objectives, and resolve life’s unanswered questions.