The Importance of Financial Planning

How good are you at budgeting? We have some clients who can tell us, down to the penny, how much they spend each month, while we have others who would rather look at expenses from thirty-thousand feet and “ballpark” their estimated spending. Depending on how much time you enjoy examining your finances, you may find that you can develop a rough financial plan on your own. However, you may also find that you don’t have the time or interest to devote to monitoring your financial future, and that’s where a financial planner comes in.

Developing a Comprehensive Financial Plan

A financial planner can help you manage your finances and make informed spending decisions, allowing you to save more and grow your investments. A comprehensive financial plan provides a holistic analysis of not only your cash flow before and during retirement, but also risk management, estate planning and wealth management.

Retirement Planning

The number one question working clients ask us is “When can I retire?” A financial planner can help you answer that question by understanding your longer-term financial and life goals helping you analyze the trade-offs between retiring early and working longer. A financial planning firm like Insight Wealth Strategies typically uses financial planning software that can run various retirement age scenarios. A financial plan also takes into consideration the optimal time to begin receiving Social Security benefits, as well as how to maximize employer benefits so that you get the most out of your work savings between now and retirement.

Risk Management

In addition to making sure that you don’t outlive your savings, it is important that you have adequate insurance coverage in case something were to happen to you or your loved ones. A comprehensive financial plan should include an analysis of how much insurance you should have to replace your income, cover college tuition costs, and potentially pay off your home mortgage. It should also include disability and long-term care analysis, as well as the potential need for umbrella insurance.

Estate Planning

Avoiding probate can save your heirs a lot of time and money when you pass. Wills and trusts are both legal documents that ensure your assets pass to your heirs according to your wishes. Wills outline how assets should be managed upon a person’s death, but do not avoid probate. A living trust allows you to have more control over the distribution of your assets, and is generally recommended if you are married, have kids or own property. Most financial planners do not serve in an estate planning attorney capacity but should be able to refer you to one.

Wealth Management

Establishing a comprehensive financial plan provides the foundation for determining how you should invest your money. It can help you decide how aggressive you need to be to obtain your financial and life goals. A financial plan typically assumes a growth rate for your investment assets, determined by how much risk you are comfortable taking to meet those goals. If the plan results show that you can achieve those goals with less risk, you may be able to sleep better at night. Some financial planning software, including the software used by Insight Wealth Strategies, runs Monte Carlo simulations that look at 1,000 different historical investment return scenarios to gauge your probability of successfully not outliving your money, even when taking into consideration the most difficult market conditions.

Do-It-Yourself or Hire a Financial Planner

For those who have the time and interest to track their income and expenses, and have a set plan on when they want to retire, managing it on your own can save you the cost of hiring a financial planner. But if you’re not sure if you’re going to avoid outliving your assets, or are interested in making the most out of saving for your retirement and beyond, hiring a financial planner may make a lot of sense. If you are in search of a financial planner, be sure to look for one who is fee-only and a fiduciary, meaning that they are required by law to act in the best interests of their clients. They should also hold the Certified Financial Planner (CFP®) designation, which requires completion of specific coursework on financial planning as well as passing an exam. If you think you could benefit from a financial plan or simply want to make updates to the one you have with us currently, contact us today.

Written by,

Tim Raftis, CFP®

Tim Raftis, CFP®

Tim Raftis is a comprehensive, fee-only financial planner with Insight Wealth Strategies. With over 30 years in the financial services industry, Tim draws on his extensive experience to offer clients customized solutions to managing their wealth.

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Insight Wealth Strategies, LLC is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Insight Wealth Strategies, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Insight Wealth Strategies, LLC unless a client service agreement is in place.

Insight Wealth Strategies, LLC (IWS) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.


Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.