Financial Planning IS

The Gift To Give Yourself

Many of us began 2023 with a new set of resolutions, including exercising regularly, eating healthier, and getting our financial affairs in order. There are many articles written indicating the low percentage of resolutions successfully achieved. Many times, these resolutions are repeated year after year, all with good intentions, with little or no positive results. We have shared a term describing this pattern as, “important, but not urgent.” Living life and the day-to-day challenges of family, work, and other activities in community involvement become the focus. Many of the resolutions we set annually are deprioritized and soon forgotten until we approach the end of the year and have some time to reflect on what went well and areas to focus on improvement into the next year.

One of the most important resolutions to consider is completing a personal financial plan. We are living longer, resulting in a higher retirement income need, healthcare coverage including long-term care has increased at a greater rate than inflation*, and now inflation is at a 40-year-high. Another major financial outlay to plan for is the cost of helping a child through college, which has become increasingly expensive. These are a few of the important reasons to prioritize completing a personal financial plan.

An effective initial planning step is having an advisor work with you and your family to explore and understand, and prioritize your most important financial goals. A plan covers both financial defense and offense. The defensive component covers the risk of death and disability, as well as properly having wills, trusts, and healthcare initiatives in place. Financial planning offense includes establishing goals for retirement, plus other major financial commitments, such as college funding.

In addition to the components of the plan described above, there can be another important part of a plan categorized as the purpose, vision, and values of a family. This is where a financial planner can help a family develop clarity around potential inheritances to heirs, in terms of the reason, to whom, amounts, and timing. Another important area that can be addressed here is determining charities to be included in a will and the reasons they are included and amounts to be donated.

OK, let’s describe how to begin to act on this important but not urgent part of your life. The most important part of the financial plan starts when the initial planning document is completed. This is where the proverbial “rubber hits the road.” At Harrison Financial Services we have met with many families who completed a plan, and when we ask them for a copy, the families share a plan that’s three-, five-, or seven-years-old and has not been updated. They then generally reflect and come to grips that, in-fact, the plan no longer reflects their changing life.

After the initial financial plan is completed, a critical and required part of the financial planning process includes ongoing updates of goals and progress toward stated goals. This is the key to success in achieving most of the important financial goals in life. Planning requires a trade-off between current needs and wants and future financial commitments. Today, we are responsible for virtually all our savings, as well as systematically investing those savings to supplement social security in retirement. This important goal is guided by developing a strategy during working years to accumulate assets to be able to maintain the lifestyle a person is accustomed to during retirement, as well as protect their assets from market volatility when income distributions start as retirement begins. At Harrison Financial Services, we have developed capabilities through a culture of caring, to help our clients achieve their planning results. This includes a disciplined process guided by a team of highly educated and qualified planners. Our HFS team has over 30 combined post-graduate degrees and designations. This enables us to provide each of our clients with effective ideas and advice to help achieve their goals through the ongoing disciplined coaching they receive.

We hope for those of you who have not completed a personal financial plan, to give yourself the gift of financial planning this year, which can provide lifetime benefits into the golden years of retirement for you and your family. We hope 2023 provides you health and prosperity, and success for the goals and resolutions most important to you.

For more information about Harrison Financial Services, please visit hfs.nm.com.

* Source: Consumer Insurance Guide “Cost of Long-Term Care Rising Faster Than Inflation,” March 2020

BY JACK MCKEEGAN PRIVATE WEALTH ADVISOR HARRISON FINANCIAL SERVICES