5 ways to (finally) kick-start your financial plan

For many people, the idea of long-term financial planning may seem like that dentist visit or home repair project you keep putting off — you know you’ll have to do it eventually, but actually sitting down and organizing your budget, portfolio, estate, and retirement plans, all while juggling a career, family life, and a never-ending roster of other responsibilities, always seems to fall to the bottom of the list.

Often, the first step towards unwinding anxiety around managing your personal finances is working with a financial advisor who can help you understand where you stand and, more importantly, where you could be. Here are five topics for you to consider and discuss with a financial advisor:

How do I maximize my retirement savings? 

Planning for a long retirement often brings up questions. How can I ensure my nest egg lasts? Am I on track to meet my goals? The first step is checking in on your retirement savings to see if the amount you’re saving is on pace to provide financial stability in retirement. 

This is where a financial advisor can provide valuable insight. If you’re on track, a financial advisor can help you identify ways to improve returns without magnifying risks. If you’re off track, your financial advisor can help you determine why. 

Keep your portfolio on track toward your goals

Are you confident that your portfolio is set up to meet your goals? Whether you’ve been making the investment decisions for your household up until now, or you’re wondering how to get started, a financial advisor has access to tools and services that can help ensure your portfolio is keeping you on track toward your long-term financial goals. 

Your financial advisor will evaluate the level of potential return needed to achieve your goals, the amount of risk you’re willing to take in your investments, and your time horizon, among other factors, to help ensure you have an appropriate asset allocation (i.e., mix of stocks, bonds, and other types of assets) in your portfolio. They can also help select securities or funds in each of these asset classes.

Also remember that your financial goals and risk tolerance will evolve over time, so your financial advisor will work with you to revisit your portfolio and adjust where necessary. 

Implement tax-smart strategies

Taxes can act as a big drag on your portfolio. But did you know tax-smart investing techniques may potentially add up to 2% to your annual returns? Strategies like tax-loss harvesting, income smoothing, and certain approaches to giving to loved ones and donating to causes you care about may help you keep more of what you potentially earn. However, these strategies can take time and are often highly complex. A financial advisor has access to special tools, resources, and thoughtful leadership on changing tax policies to help you implement such strategies so you don’t have to.

Create an estate plan

It may be difficult to think about what happens after you’re gone. Having a well-thought-out estate plan can help alleviate your worries about the future. With the help of a financial advisor, you can take steps to plan how your assets will be distributed to your loved ones and charitable causes after your death so you don’t have to navigate the process alone. 

By taking these steps with help from your financial advisor and legal counsel, you can help ensure your legacy is preserved according to your wishes, providing a sense of security and certainty for the future.

Plan for aging parents 

Preparing for your parents’ future, as well as your own, can be a crucial part of financial planning. This is a significant responsibility that requires careful thought and planning and is often top-of-mind for women. In fact, women are more likely to focus on the costs of elder care compared to men (86% vs. 75%) when working with a financial professional, according to Morgan Stanley’s 2021 Investor Pulse Poll of High Net Worth Women. 

One of the first steps you can take is to sit down with your parents and a financial advisor to discuss their estate plan. This conversation should include discussions about a will, healthcare directives, long-term care, and power of attorney. Having these discussions early on will not only help your parents outline their wishes, it can eliminate uncertainty around any medical and financial decisions you may need to make on their behalf. 

 Working with a Financial Advisor 

Working with a professional who specializes in creating and maintaining financial plans may relieve any stress you feel around making the right decisions for you and your family. Whatever your goal — paying for college, buying real estate, planning for retirement, engaging in philanthropy — your financial advisor will work with you to create a tailored plan that aligns with your objectives and provide you with a roadmap to get there.  

This material has been prepared for informational purposes only. It does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Jordan Thayer is a financial advisor in Seattle, Wash., at Morgan Stanley Smith Barney LLC. He can be reached by email at jordan.thayer@ms.com or by telephone at (206) 628-4681.