What Can a Financial Plan Do for Me?

By Justin Setser – Senior Vice President & Senior Portfolio Manager

In today’s complex financial landscape, the importance of having a solid financial plan cannot be overstated. Financial planning serves as a guiding light, illuminating the path towards achieving your life’s aspirations and ensuring a secure and comfortable future. From setting clear financial goals to navigating investment strategies, tax optimization, estate planning, and retirement planning, a well-crafted financial plan can be the key to long-term financial success.

Financial planning begins with identifying your short-term and long-term goals. Whether it is buying your dream home, funding your children’s or grandchildren’s education, starting a business, or retiring comfortably, these goals form the foundation of your financial plan. One of the fundamental benefits of a financial plan is that it provides you with a comprehensive overview of your financial situation. This holistic view empowers you to make informed decisions and develop strategies that align with your goals. A financial plan can cover a range of topics, including:

Investment Planning 
Investing wisely is key to growing and maintaining your wealth over time. A financial plan considers your risk tolerance, time horizon, and financial objectives to design an investment strategy that suits your individual circumstances. Integrating your investment strategy into your financial plan can help you sleep at night, knowing that your investment allocation is appropriate for your own situation and goals.

Retirement Planning and Peace of Mind
One of the most critical aspects of financial planning is ensuring a comfortable retirement. With a solid plan in place, you can face your golden years with confidence and peace of mind. Our financial planning uses 1,000 different simulations of returns for your plan, showing how variations in investment rates of return each year can affect your results. This will provide you with an easy-to-understand probability of success for your plan.

Tax Planning
Taxes can significantly impact your long-term financial well-being. We can all agree that nobody likes seeing their hard-earned money go to Washington, D.C. to be managed on their behalf. A comprehensive financial plan incorporates tax optimization strategies to minimize your tax burden, both now and in the future. Here are several examples of tax planning strategies:

• Cash flow management to ensure tax-efficient withdrawal strategies.
• Medicare IRMAA (income-related monthly adjustment amount) planning. IRMAA is a surcharge on Medicare Part B & Part D premiums based on your modified adjusted gross income. Without proper planning, these premiums can add up to thousands of dollars annually.
• Social Security planning and optimization. Does a high inflationary environment like we have recently seen increase the benefits of delaying Social Security?
• Roth conversion planning. Does this make sense for you in a down market, or while federal income tax rates are historically low?
• Stock option planning for NQSOs (non-qualified stock options) and ISOs (incentive stock options).
• Charitable gifting strategies such as qualified charitable distributions (QCDs), donating appreciated securities, naming a charity as an IRA beneficiary, donor-advised funds, and charitable trusts.
• Inherited IRA planning for non-spouse beneficiaries. The SECURE Act requires the entire balance of the inherited IRA to be distributed or withdrawn within 10 years of the owner’s death in most cases.

Estate Planning and Legacy Building
Your financial plan will extend beyond your lifetime through estate planning. By outlining how your assets will be distributed and your affairs managed after your passing, you ensure that your loved ones are taken care of according to your wishes. Estate planning also includes strategies to minimize estate taxes and maximize the inheritance you leave behind.

A robust financial plan is not set in stone; it is designed to adapt to changes in your life, goals, and financial situation. It is a powerful tool that empowers you to take control of your financial future and serves as your roadmap to financial success. Whether you are just starting your career, approaching retirement, or already there, the benefits of a well-crafted financial plan are immeasurable. The team of professionals at Central Trust want to be the ones you call upon to ensure you are secure in the knowledge that you are on the path to achieving your aspirations.