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Personal Finance

The Importance of a Financial Plan


When you’re planning a road trip for you and your family, you don’t just get in your car and start driving — it’s just the opposite. When you plan a trip, there are often many variables to consider. You may be looking for the fastest route, the cheapest, or maybe the one with the best view. You may consider factors like stops along the way and cities or activities you and your family may be interested in checking out. Formulating a solid plan for your travels is the key to success. This concept is precisely the same when it comes to your financial plan.

We know each of our clients are unique. We all have different considerations on our financial journey, but all of our clients should have one thing in common — a destination. That is why we want to work with you to develop a detailed financial plan. This service is our proprietary roadmap for getting you from where you are now to your destination safely and as smoothly as possible. Because every one of our clients is different, we have developed a process that will allow us to build the ideal investment strategy around dozens of factors that are completely tailored to each of our clients.

Throughout your life, you move into and out of different financial stages. Often, whether you are transitioning out of the military or into a new phase of life, it is crucial to revisit your existing financial plan and make changes appropriate for your new goals, time horizon, and risk tolerance. Some examples of these stages may be:

  • When you first enlist or accept a commission
  • When you get a promotion
  • When you get married
  • When you are preparing for a PCS move
  • When you are going on deployment
  • When you want to buy your first house
  • When you have a baby
  • When you change jobs or transition out of the military
  • When all your children have moved out of the house
  • When you reach 55 and approaching retirement
  • When you retire

For many of our clients, obtaining a financial plan is absolutely critical. When you go through one of these stages many things change. It is often the case that our clients need a comprehensive financial plan to properly create the ideal financial portfolio. Our goal is not just to try and get the best possible return the market has to offer. Instead, our goal is to get the best possible return on your investment given the amount of risk you are willing to take on. Knowing how much risk you can acceptably take on is mission critical.

In order to assess the risk levels that make sense for you, one should consider all aspects of your current and future financial goals. A comprehensive financial plan is similar to a good health and wellness plan. When developing a good health and wellness plan, you should consider all aspects of your health because each element affects the rest. These considerations all come together to help create your overall health and wellness. Your finances work similarly in that many of your current positions depend on and influence other areas of your portfolio. When you have a solid financial plan, you are on the right path to creating a healthy financial future for you and your entire family.

A comprehensive financial plan involves:

A thorough review of your current financial situation
A discussion and understanding of your long term, financial goals and objectives
The development of a plan including all financial products needed to take you from where you are today to where you need to be in the future

For most people, a solid plan will involve the use of financial strategies in several areas specific to your life situation and goals such as:

  • Retirement planning
  • Cash flow analysis
  • College planning
  • Tax management
  • Estate management
  • Risk management
  • Debt structure
  • Insurance planning

Life happens fast and taking your family’s structure into account is also a key piece of plan development. Think about life issues such as aging parents now, or perhaps sooner than expected. Special needs trusts or charitable gifting are all variables to consider that make having a detailed financial plan so crucial for our clients.

One of the benefits of working with AAFMAA Wealth Management & Trust, is that you get a 100% personally tailored comprehensive financial plan that will encompass all the necessary and relevant aspects of your economic well being. Another benefit is that once your plan has been established, our clients get the advantage of meeting with an advisor on an annual basis to update their plan and consider new goals you may be hoping to accomplish for no additional cost. It is important to note that once your plan has been created, you are under no obligation or expectations that the plan recommendations be executed through AWM&T, or its parent organization, although you are free to do so if you wish.

Creating, monitoring and updating your financial plan throughout your life is the only way to ensure that you stay on track giving you the peace of mind knowing that you are making the right decisions allowing your money to work for you in the most efficient way possible. In other words, your financial plan becomes a fluid, living document designed just for you.