Take Charge and Develop a Financial Plan

Physician's Money Digest, November15 2004, Volume 11, Issue 21

According to a recent FinancialPlanning Association survey,56% of Americans are worriedthat they won't have enough moneywhen retirement comes. If you're part ofthis group and you're concerned aboutmaking sure you have enough funds forretirement, there are some steps you cantake to ease your fears.

Financial Steps

The first step you should take to helpfund your golden years is to develop acomprehensive financial plan that incorporatesall aspects of your finances. TheCertified Financial Planner Board ofStandards Inc found that only 37% ofinvestors aged 40 to 54 have taken thetime to develop a financial plan. A planwill help get you one step closer to havinga comfortable retirement, as well asprovide the comfort that comes withknowing your finances are in order.

The first step in establishing a well-roundedfinancial plan is to set up a meetingwith your financial consultant to discusswhat you would like your investmentsto achieve for you. You shouldaddress issues such as the age you wouldlike to retire, whether or not you anticipateproviding for your children's collegeexpenses, and what you have done so farto reduce your tax liability.

The next step is to gather some data.Simply put, you need to take an inventoryof what you own and what you owe.Some of the information needed willcome from your bank; life insurance andbrokerage statements; your employer'sretirement plan statement; your incometax return; and your trust, will, and otherestate planning documents. In addition,during this important data-gatheringphase, you should keep in mind anyassets you may have in custodialaccounts, IRAs, and real estate.

Your financial consultant should thenbe able to help you develop a plan thatmeets your needs. They will present theirideas to you and discuss the many aspectsof it with you. During the presentation ofyour plan, make sure you understand allthe pieces of it and feel comfortable withtheir suggestions. Your financial consultantshould be able to explain all thedetails of the plan as well as how it canhelp you achieve your goals. If your plan isvery complex, you may want to meet withyour financial consultant several times todissect it into digestible pieces.

Plan in Motion

Once you are familiar with your plan,it is time to put it into action. You shoulddiscuss a reasonable time frame forimplementation with your financial consultant.Some recommendations, such asmoving from taxable to tax-advantagedinvestments, will be easily accomplished.Others, such as drafting appropriateestate planning documents, may requirea bit more time and effort.

Once your plan is in place and you'vetaken care of your action steps, youshould feel pretty good about your financialsituation. But you are not quite doneyet. The future is bound to have twistsand turns. Therefore, it's important tomake adjustments to your financial planthat reflect lifestyle changes. An annualmeeting with your financial consultant todiscuss your asset allocation may be thebest way to ensure your financial plan isalways up to date and in sync with yourcurrent lifestyle and goals.

is vice president,

investments, and a financial

consultant with AG Edwards in

Hillsborough, NJ. He welcomes

questions or comments at 800-288-0901 or www.agedwards.com/fc/joseph.lagowski. This article was provided

by AG Edwards & Sons, Inc, member SIPC.

Joseph F. Lagowski