Have you ever wondered where is the best place to start reviewing your finances? Is it cash flow, debt reduction, or an investment analysis? Is it understanding beta, standard deviation or the differences between tactical, active or passive investing?
For most people, the answer is, “I don’t know.” It’s hard to look at your overall financial picture and see a unified and focused portfolio if you don’t know what to look for and how to keep it organized. And if you don’t know what to look for, you may not know when it’s time to update one of your financial strategies.
If this sounds like a similar situation, it may be time to give your financial plan some CPR.
What is a Comprehensive Planning Review (CPR)?
In the medical world, CPR is used to restore circulation when the heart has ceased pumping on its own. Financially, a comprehensive planning review does the same. It gathers up every moving part of a financial planning strategy and makes sure they are circulating together to bring life and success to the financial plan as a whole. Every element of your financial plan plays an important role in your journey to obtain retirement peace of mind.
A CPR analyzes a number of integral pieces of your financial planning strategy, including the four financial domains that are independent:
- Cash Flow
This isn’t something you do once and then hope it all works out when you get to your retirement years. A financial plan is a living document, something that needs to be reevaluated and updated to continue meeting your needs, and a regular CPR makes this happen.
What To Expect From a Comprehensive Planning Review
When you sit down with me, we will work through all aspects of your financial life to create a plan, reduce risk, cut down on fees, minimize taxes, and address the things that need to be addressed to move you forward.
We’ll get your assets organized, develop a custom financial roadmap so you can make your goals a reality, make sure your risk matches your current life situation. Then we will align your portfolio with your needs and goals.
Do You Need Financial CPR?
When it comes time to conduct a financial plan CPR, where should you begin? As explained, there are four financial domains that are interdependent: protection, assets, liabilities and cash flow.
We believe it’s most important to start with protection. There are no “do overs” if at the time of impact you discover that your liability limits are inadequate, or that your group disability insurance does not include your bonuses. Or that your legal documents such as your will, health care proxy and power of attorney are outdated and no longer meet your objectives. Or worse yet, that you have a current will but the beneficiaries on your life insurance and IRAs are not coordinated with your stated objectives.
What about your life insurance? How did you determine what the right amounts was? How long ago did you review your insurance? When does it expire? Is it funded properly? But protection does not just mean insurance and legal documents. What about liquidity? What about downside protection from the market losses?
If you answer yes to any of the questions below, it’s time to schedule a Comprehensive Planning Review!
- I haven’t looked at my life insurance in detail in several years.
- I’ve had changes in my life, income, or goals since the last time I reviewed my finances.
- I’ve never had one advisor review all accounts from all vendors.
- I’m not sure what my management fees are.
- I don’t have a will, or I haven’t updated it in years.
- My advisor has not discussed what will happen to my income plan if either I, or my spouse, pass away first.
- My advisor has not discussed healthcare costs in retirement and how I will cover them.
- My advisor has not discussed the best tax strategies for passing assets on to my heirs.
How did you do? Do you see any gaps in your current plan? It is your responsibility to be proactive or better yet to work with an advisor who has a protection- first philosophy and sees you as the primary asset.
There is plenty of time to work on the inefficiencies of your plan. As a matter of fact, when working with an advisor that focuses on all four financial domains, many times inefficiencies can be identified, recaptured and redeployed allowing you to obtain optimal financial balance without any additional outlay.
If you have a hard time managing all the pieces of your financial plan, then it’s time for us to sit down and work through the details. To schedule an appointment for your comprehensive planning review, please contact me at 585.264.1111 or email me directly at Carl_Lutz@glic.com.
Since 1999, Carl Lutz has served more than 400 families and business owners in the area of building and protecting wealth. Today he spends much of his time helping pre-retirees transition from accumulation to distribution, in conjunction with serving business owners in the areas of estate and succession planning. Along with nearly two decades of experience, he has received the "Advanced Financial Planning" designation, the Chartered Financial Consultant® (ChFC®), signifying his comprehensive and in-depth knowledge of financial services. To learn more about Carl, visit www.lutzandassociates.com or connect with him on LinkedIn.