Twenty-six percent of respondents said they already have a solid financial plan. I totally commend this group for stepping out ahead of the pack. Even if you have a plan, it can still be a good idea to put planning on your New Year's Resolution list for a checkup. Who created your plan? Was it an investment manager, an insurance agent, an annuity salesman? If anyone other than a planner created it, they may have missed something. For example, if your insurance agent helped you put together a plan to save money for retirement by selling you an annuity, they may have overlooked your pension benefits and desire to give each of your children a down payment for their first home. Some financial disciplines don't look at your whole situation.
If your plan has not been reviewed in a year, put it on your resolution list. Personal situations evolve, children are born, grandparents die, people are married and divorced, we get laid off or take on a new job. These life changes create the need to review your financial plan and avoid unintended consequences. One of the most commonly overlooked items is beneficiary designation. Having this done correctly can make or break your estate planning.
Don't forget that the economy is constantly changing now. Bond rates are low, the market is constantly in flux, and who knows how the "fiscal cliff" discussions will end. Having discussions with a financial planner can help you put these economic factors in perspective given your personal situation.
The last reason people gave for not putting financial planning on the list of New Year's Resolutions is that they did not have an advisor. This is an easy one. There are about a gazillion advisors out there! Your job is to find one that works best for you. Ask yourself these questions to help choose one.
- What type of help do I need? Is it budgeting and debt payment? Or investment advice? Or an insurance review?
- Do I want to pay a flat fee for advice, or ongoing fees for management and services?
- What is the minimum account balance an advisor will accept?
- Does the advisor understand my personal situation?