The evolution of a financial plan will change over time, however, the process will always remain constant.
The words “Financial Plan” often get thrown around in my industry. It could be defined in a variety of ways dependent on your situation. One part of the phrase that is consistent and hard to do is “Plan”.
A financial plan is often a detailed, or somewhat detailed, road map that we implement based on a variety of concerns our clients have. It takes into account your objectives, income, lifestyle, health, investments, taxes, and much more. The plan is built around YOU. At the same time we work within many constraints to maximize your income, performance, tax minimization, and dealing with transition with your spouse due to health, death, or something else.
After the plan is implemented, the real work begins. Even though my excel spreadsheet looks great. The best laid plans will change. Why? Because life isn’t static. You don’t live in an excel spread sheet.
Over time we monitor those plans annually and within those time frames we also do a deep analysis to make sure our thoughts still make sense for both of us.
Quite often, about every time, plans change. The reasons vary but most of it has to do with changes in your life. Very very few times does it change due to the economy or the markets.
Here are some reasons our plans usually change:
- Once you start retirement and we evaluate your income needs and the are different from our assumptions.
- We change our thinking on how we will claim Social Security benefits.
- The longer you are into your retirement, the more a goal you had 10 or 15 years ago might not make sense anymore.
- Our industry changes so if we could accomplish something in a much simpler and cost effective way, I will take advantage of it if it makes sense.
- Death, divorce, and health also have a tendency to change plans.
- A host of other things which are sometimes way out of our control.
You must understand, there will always be parts of plans that will have to change. The great thing is that the process of planning will never have to change. This process will allow us to focus on the destination knowing, sometimes, the course will have to change.
