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Pre-Retirement Financial Planning

One Coherent Plan

After years of working you’ve likely accumulated a lot.  This likely includes investment and insurance accounts from various sources, a home, cars, collectibles, your may own a business, and have other financial interests and obligations.  All of these accounts contribute to your pre-retirement financial planning profile as you enter retirement either as a financial resource or to manage the risk to your financial resources.

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Here’s the question:  “How do all of these interests work together in one financial picture?”

Organizing all of those accounts, reconciling them with your needs and goals, and projecting your path toward your goals is one coherent financial plan.

That’s the value of a pre-retirement financial plan:  it shows all of your resources and needs, today and tomorrow, and shows them like a road map toward your goals.  Your plan includes visuals, analytics, how much progress you’ve made, and a meter that predicts your probability of success.  If a financial plan were a road trip, it would be the road map showing you the way to your (financial) destination.  Creating the retirement plan early–before you retire–is one of the keys to a well-planned retirement.

Becoming a Standard Offering

Financial planning is going mass market.  

In fact, a good financial advisor will include financial planning as part of his or her standard offering.  Without it, both you and your financial advisor would be missing the one tool which provides a holistic look at your financial position today and tomorrow.

If that sounds like a financial plan has become standard operating procedure, it’s getting there.  Perhaps only 15-20% of financial advisors subscribe to a financial planning software package but that number is growing.  If a financial advisor does not offer financial planning services, you might ask “why not”?

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Pre-Retirement Resources


How to Build a Retirement Portfolio

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Social Security Guide: What You Need To Know Before Retirement

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Secure Your Retirement: An Investment Guide for Pre-Retiree

Now that you’re considering retirement, it’s time to address how your investment needs may differ…

Costs Less Than You Think

It wasn’t that many years ago that financial plans were expensive and mostly used by the most wealthy.  That’s changed.


Because the utility of the plan is so widely recognized and the financial planning software is so much better and more powerful these days, many financial advisors have made financial planning a part of their value proposition to clients.

There are two ways financial advisors generally charge for a plan;

  1. as part of their asset management fee or 
  2. as a separate fee.
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A Map for Your Financial Journey

Either way, the value of a plan, depending upon the complexity of the client’s holdings and the sophistication of the retirement financial advisor, can range from a few hundred to a few thousand dollars for the initial plan.  More complex client planning needs can cost substantially more.

Advisors usually charge a fraction of that initial fee for a periodic update and client review of the plan, which becomes an integral part of the annual review the advisor holds with the client.

Without a customized financial plan you may have multiple independent strategies that may work just fine but you won’t be able to see how they work together.  Will you have enough retirement income?  The plan shows that.

Financial Planning



A Mutual Investment In Time

A worthwhile plan reflects the interests of the client, the knowledge and experience of the financial advisor, and includes your portfolio allocation, 401k or other retirement accounts, insurance policies, pensions, Social Security, income, expenses (such as mortgage payment or rental expenses, “what if” scenarios, and goals–among other things–into one plan.  That takes time.

A thoughtfully created financial plan may take 5-7 hours of dedicated financial advisor time, plus client time.  The advisor needs to gather and analyze financial documents from the client,  listen and understand the client’s needs and goals, take the time to create the plan, adjust the plan (because there are likely going to be adjustments to make after presenting that first draft of the  plan to the client), and then arriving at an accurate characterization of the client’s position and goals:  a client-advisor mutual agreement that the plan “hits the mark”.  Once that is achieved, the plan serves as a point of reference to which both the client and financial advisor can refer with confidence to help guide the client’s financial journey.

The plan is generally reviewed and updated annually.

Why You Might Need a Financial Plan

You wouldn’t take a long drive to a destination you’ve never been.  A customized financial plan is a map for your financial journey toward your goals–another place you’ve never been.

The plan will also serve as your personal financial statements.  A corporation could not function without measuring its activities and the same is true for you.  If you can measure it, you can manage it.

Take Our Quick Financial Quiz

How financially literate are you compared to the average American? You can take one of the shortest of those financial literacy quizzes here (it’s only 6 questions) to get a taste of the questions asked.

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