August 28, 2023

What is Financial Planning?

What is Financial Planning?

Financial planning is the act of taking a universal look at your financial circumstances to evaluate your entire financial landscape. A well-prepared financial plan covers your current and future financial situation and your current and future goals. Your plan should include assets, liabilities, savings, income, expenses, taxes, insurance, and retirement lifestyle.

Every plan, like every person, is unique.  Everyone has different circumstances, wishes, needs, and ideals that ultimately come together to create your plan. Notably, financial planning helps answer the question of how to attain both short and long-term goals.

Build the foundation for retirement.

Long-term financial planning is a collaborative process between the financial advisor and the client. The planning process estimates inflation, income, and expenses; and uses forecasting to determine investment returns over time. Financial planning also evaluates your current savings and investment strategies against your future retirement goals. According to a 2023 Charles Schwab Financial Planning Survey, “only about one-third, or 35% of Americans have a documented financial plan. Among those who do, seven in ten say it makes them feel more in control of their finances and nine in ten say they feel confident that they will reach their financial goals.” (Shariff,2023)

A strong financial plan will help answer questions such as:

  • How long must I work? 
  • How much savings do I need?
  • How much can I spend?
  • How much risk must I take to meet my goals?
  • What if the unexpected happens?

What is the importance of having a financial plan?

Financial planning aims to give a current financial picture and then identify any changes that need to be made.  These changes should increase your likelihood of achieving your goals or improve the chance of success of your plan.

Planning also helps clients get organized by pulling all money-related items into one place. Most importantly, planning helps reduce uncertainties and provide confidence even through adverse market conditions.

Financial planning can help clients get on the right track toward their financial goals. A plan can also help clients live life to their fullest by giving them confidence that they can afford the lifestyle they want before and after retirement.

Nearly 65% of Americans have no formal financial plan.  Not having enough money and the perceived complexity of financial plans are the biggest barriers to having a financial plan. These perceptions are far from the truth, as anyone can be helped by having a financial plan. No matter the size of the clients’ assets, the lessons learned from going through the financial planning process can be beneficial to anyone.

What you can expect when you engage someone from Marcum Wealth to build your financial plan:

  • Your initial Financial Plan is complimentary with no obligation!
  • Plans are developed hand in hand with you and a financial advisor
  • Plans are integrated with our investment strategy
  • Plans drive our asset allocation advice
  • Plans are fully customizable for each client
  • Plans guide us toward definitive actions to take

Your financial plan is a living document we update annually with every life event or major financial decision to keep you on track for your financial goals.

Please reach out to one of our advisors by giving us a call at (330) 563-4265

Shariff, H. (2023, June 23). Schwab’s Modern Wealth Survey Reveals Nearly Half of Americans Feel Wealthy. . .But With a Twist: They Don’t Measure It in Dollars & Cents.

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