Joining us for our monthly financial segment is Jeffery Nowell, a wealth management officer for People's United Bank. He has some financial planning tips.
Q: Who should consider financial planning?
1. A recent AARP study found that many Americans spend more time planning their annual vacation than they do planning for retirement.
2. Yet, many of us have goals in addition to retiring someday. Perhaps we have children we want to send to college, or a home we're planning to buy.
3. Whatever the goal, or set of goals, it is important to put a plan into place that will help you get there.
Q: So how does one get started?
If education savings is the goal, decide what percentage of those school costs you want to provide for and then research the total costs associated with the class of educational institution you have in mind.
Ultimately, the goal is to understand if you are doing what you need to today to be where you want to be tomorrow. If you aren't, then you make whatever changes you can to reach that goal.Q: Where can people go for help?
A trusted financial advisor is a good place to start. Ask friends or family for a referral, or check with your accountant or attorney for a recommendation. Otherwise, there are a number of financial planning tools available on the internet that can point you in the right direction. But no calculator will work without first creating a savings budget that you can put into place and stick to. The first step to financial planning is to understand your starting point. What are your assets and liabilities, your income and your expenses? From there, identify what it is you would like to accomplish.
Another recent study found that less than half of American workers have calculated how much they will need to save for retirement. Using the example of retirement, at what age would you like to retire? How much money will you need in today's dollars to live the lifestyle you envision? Keep in mind that once you retire, EVERY DAY is a Saturday. Will you spend your days traveling, gardening, or volunteering? How does your perfect retirement compare to your lifestyle today?
I have found that for many retirees, their standard of living was the same on their first day of retirement as it was on their last day of work, so don't necessarily assume you'll be "living on less" without examining the issue carefully.Anyone who has a financial goal they would like to accomplish. What do you mean by financial planning?
At its most basic level, financial planning is about measuring your resources against your goals. In other words, "what do I have and where do I want to go?"