Three questions to ask about your financial plan

People think that just because an “advisor” has run some financial projections for them that they have a financial plan. In reality, the plan is not the finish line, it’s the start of a dynamic conversation that helps you stay on top of your wealth. Here are three questions to ask your financial advisor about your financial plan. If your advisor can’t answer these, then they aren’t serving you well.

What long-run trends do you see in my financial plan?

People often like to speculate on potential trends in the economy, politics, and technology, but may ignore (or simply not be aware of) trends within a personal financial picture. Trends in a financial plan are based on projections incorporating many factors that serve as a roadmap, not a definitive outcome. But observable trends can still help us navigate to better prepare for the future. For example, does it seem like my tax rate increases, decreases, or stays stable over time? Does my need for certain types of insurance increase or decrease as my total wealth changes? This type of conversation can help lay the groundwork for expectations and next steps to meet your goals.

What should I prioritize in the near term?

Sometimes we don’t know where to focus attention until all the pieces have been put together in a comprehensive plan. Saving for retirement, paying down debt, and covering education costs for children may all be goals competing for resources at the same time. Life events, like having a child or changing jobs, can create new demands. A dialog with your advisor that lays out specific tasks may help reduce “analysis paralysis.” Showing how your plan can benefit from certain actions could bring more confidence to your decision making. The top priority doesn’t need to be the most impactful step. For instance, one might address a relatively easy task first, to gain momentum in a long list of moves.

What are my blind spots?

This is asking “what risks or opportunities are not on my radar?” Confirming life and financial goals with your advisor can bring up a new strategy to assess. Your advisor might reflect on steps that could bring more confidence to your plan success, like delaying a large purchase. Changes to retirement, tax, and estate legislation might create new issues to address. A blind spot normally suggests something negative, but we might identify something unexpectedly positive as well, like being able to retire sooner or gift more to family and charity.

Chances are if you’ve been working with Heritage, we’ve already brought these topics to your attention and tackled a list of to-dos together. Even so, taking a step back can uncover new opportunities.

If you aren’t a client of Heritage Financial and are ready to feel confident about your financial future, let’s talk.

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