5 Reasons You Need a Financial Plan
A documented, living and accessible plan makes it more likely you’ll pursue the financial future you want.
What does your financial future look like? Many of us put money in our 401(k) well before we reach retirement age, and many of us have a stock portfolio, or another common investment option. But do you truly have a plan for the coming years?
When you think about your family and their financial health, how do they fit into the equation? Do you have a strategy for complex challenges, such as navigating a career change or job loss, planning for a child’s education, or preparing a will or estate plan? If not, your financial future may be a bit blurry.
A formal financial plan can help. As you plan, you clarify what financial well-being looks like for you – and how you’ll achieve it. Here are five reasons this process is extremely valuable.
1. You encourage healthy financial habits.
Developing a formal plan requires you to match your assets (and future income) with your financial goals and dreams. As with many other things in life, those with a plan tend to develop the habits needed to make it happen. As a result, those goals and dreams are more likely to become reality.
2. You pinpoint your cash-flow needs.
We all have various financial needs that must be met, and those change as we move through life’s various stages. A formal plan ensures you fully understand your needs, your budget and what adjustments are required, if any, to ensure you are able to live your preferred lifestyle.
3. You plan for life’s major events or purchases.
Yes, retirement planning is often paramount, and achieving your optimal retirement age is something that must be carefully thought through. But what about a child’s or grandchild’s education, purchasing a larger home or selling a small business? These goals require preparation and intentionality. A documented plan can surface a milestone that may be a decade or two away, so you can address it now.
4. You identify insurance gaps.
A sound insurance strategy can help protect your family from the financial consequences of unexpected events. Through a formal planning exercise, you can identify strategies such as how to cover healthcare during retirement or life insurance options to protect your spouse or your children.
5. You gain clarity on your future.
A living, documented plan is a guiding reference point for you and your financial advisor. As your priorities change, so can your plan, and it can be a discussion guide as you navigate life’s hurdles. You and your spouse may decide that you would like to share your plan with your children, so they understand your vision as you progress through your senior years. Additionally, this provides you with an organic opportunity to encourage them to develop their own financial plan.
No situation is too small or too standard. No situation is too complicated. At Old National Investments, we believe that every client, regardless of stage of life or circumstance, should have a personal financial plan — a plan that charts the course for them to pursue their unique goals for today and the future. And it all starts with a conversation.
