Clark Wealth Partners is in the process of creating a plan to reach your financial goals. It looks at your assets, such as your investment portfolio and cash, as well as your liabilities, like debt and mortgages.
Financial planners typically charge a fee for their services. The amount varies, and you should compare different planners’ fees, services and approach before making a decision.
Investing Guidance
If you don’t have a good grasp of the risks associated with an investment or aren’t familiar with how your investments relate to your goals, financial planning might be worth the money. Financial planners are trained to understand your unique financial situation and can help you create a plan that aligns your investment portfolio with your priorities.
Financial planners can be independent professionals who work on their own or in conjunction with a financial services firm or bank. They may also hold professional credentials such as the Certified Financial Planner (CFP) designation, which requires a significant amount of education, hands-on experience and rigorous testing to earn. Others may have titles such as financial advisor, CPA or estate planning attorney and be licensed to sell financial products like insurance or investments.
Some financial planners specialize in specific aspects of financial planning, while others provide comprehensive guidance on every aspect of your finances. They typically focus on the big picture and are considered fiduciaries by law, meaning they must always act in your best interests.
While it’s important to seek financial advice at any stage, it can be especially valuable before making a major life change that could affect your finances. These include purchasing a new home, starting a business or getting married. Financial planners can help you determine if these changes require a change in strategy and provide guidance on how to adapt.
An Ellevest financial planner can help you prioritize your overlapping goals and identify the trade-offs involved, so you can make informed decisions that will support your long-term goals. We’ll develop investment portfolios tailored to your needs, including recommendations for how much to invest and how long to commit your assets.
Retirement Planning
Retirement planning is about preparing for the future and ensuring that you’ll have enough income to live comfortably in retirement. This process involves setting savings goals and investing wisely to help you reach those goals. It also includes making plans for paying down debt, reducing living expenses and identifying any potential issues that may arise in the future.
Having plenty of money in retirement will help you maintain your standard of living and make the most of your newfound freedom. But if you don’t plan carefully, you could end up running out of money and have to work well into your later years or even go back to the workforce after retiring. A financial planner can help you develop a realistic savings and investment strategy for your situation, allowing you to enjoy the lifestyle you desire in retirement.
As you get closer to retirement age, it’s important to pay off any lingering debts, as high interest rates can eat into your savings and reduce the amount of money you have available for retirement. This is particularly true for credit card and personal loan debt, which tend to carry higher interest rates than the long-term market averages. You should also take advantage of any catch-up contributions that are available to savers over the age of 50.
There are many different factors to consider when it comes to retirement planning, and your needs will change as you grow older. A financial planner can help you assess your current situation, recommend investments that match your risk tolerance and adjust your plan as necessary. These professionals often have a broad knowledge of all areas of financial planning and can help you set short- and long-term goals for all stages of your life.
Tax Strategy
Tax strategy is essential for anyone looking to minimize taxes and preserve wealth. This is particularly important for people who run a business or have complex financial situations that require expert tax knowledge and analysis. Professionals who offer tax planning services can reduce the stress of filing taxes, ensure compliance with tax laws, and help clients save money through strategic investment timing and other strategies.
Effective tax management can significantly reduce liability, improve cash flow, and align financial decisions with long-term goals. A comprehensive strategy leverages available tax incentives and ensures compliance with governing regulations. Depending on the situation, this may include strategies like income structuring and maximizing deductions and credits. It also involves strategic timing of income and expenses, such as accelerating expense payments to benefit from lower tax rates. It might also involve using foreign tax credit programs or strategies such as “treaty shopping” to take advantage of favorable international tax treaties.
For individuals, strategic tax planning often includes making contributions to retirement accounts and other tax-advantaged savings vehicles. It might also involve reducing taxable income through strategies such as deferring compensation and strategically timing the purchase of assets, such as real estate. In the case of businesses, it might include choosing the appropriate entity structure (sole proprietorship, partnership, LLC, S corporation, C corporation) and ensuring proper accounting to minimize tax liability. It might also involve claiming research and development tax credits or using strategies such as transfer pricing to shift profits to low-tax jurisdictions. For a comprehensive approach, it’s worth working with a reputable financial planner with deep expertise in tax laws and the ability to provide customized solutions for every client.
Goal Setting
When it comes to financial planning, goal setting is critical to achieving success. Goals provide focus, help prioritize tasks, and establish benchmarks for progress. They’re also a key component of motivation. When goals are challenging but attainable, they inspire effort. Moreover, they’re more likely to be sustained when an individual feels invested in them and has the support of others (Locke, 1996).
However, not all goals are created equal. Many goals are vague, unfocused, or poorly executed, making them difficult to achieve. To maximize the benefits of goal setting, individuals must implement a set of best practices that incorporate the core principles of SMART (specific, measurable, attainable, realistic, time-based) goal setting.
Creating a SMART goal tree is a simple and effective way to establish clear goals and ensure their proper execution. It starts with a main objective, followed by a series of smaller goals that contribute to the ultimate goal. Finally, it includes a set of criteria that indicates when the goal has been met (Locke, 1996).
A SMART plan can also encourage accountability by including regular evaluations and self-generated feedback. Ultimately, this provides an opportunity to identify obstacles and make necessary adjustments. It’s also important to seek external feedback and guidance from a professional, as they can offer insights and strategies that help you avoid common pitfalls. For example, a financial planner can provide you with a holistic perspective on your situation and recommend strategies that improve your bottom line in both the short and long run. In addition, they can help you create a legal framework that ensures your legacy is protected when you’re no longer around to manage your assets. This is an invaluable benefit that makes the cost of financial planning well worth it.
Lifestyle Creep
As careers progress and income increases, it’s common to add some luxuries to your daily life. That’s not necessarily a bad thing, but it is important to consider your long-term financial goals and how this change in spending may impact savings or investment opportunities. This is sometimes referred to as lifestyle creep, and it can happen from small splurges like adding new subscription services or ordering takeout more frequently to larger expenses like buying a vacation home. Creating and adhering to a budget can help prevent this creep and ensure that spending aligns with your financial goals.
We offer professional guidance to help our clients navigate these changes and create a financial plan that supports their desired lifestyle. If you’re interested in partnering with us to develop an effective long-term financial strategy, contact our office today.
