Article by: Montecito Capital Management, Financial Advisor Santa Barbara
A regular checkup for our financial fitness is just as important as a checkup for our physical fitness. While many focus primarily on increased income, a comprehensive long-term plan that protects assets, grows wealth, and distributes wealth according to personal goals is needed for true financial fitness. Without such a plan, one risks overspending, insufficient savings, and, above all, an unsuitable development of one’s savings and income.
“Money matters for all of life is more than one-time project, but rather an ongoing, dynamic process that helps you maintain confidence, whatever life may have in store.”
These are the fastest possible implementation of recommendations, in-person and on-demand financial advice, and regular financial counseling. When it comes to investing and asset allocation, educational and review services and digital tools, they are also important.
By taking positive steps like establishing clear goals for the long term, forming realistic budgets and having multiple sources of income, a family can secure a healthy financial retirement. Realistic financial planning for a long-term, comfortable retirement takes into consideration multiple sources of income like social security, the family’s pension, inheritances, retirement accounts, annuities, insurance values and other assets.
The reality of financial fitness is that only 36 per cent of Americans have a written long-term financial plan, and that 60 per cent worry about money every single day of their lives. A comprehensive, disciplined approach to financial planning affords a degree of financial control, builds lasting stability across life stages, and ensures peace of mind, confidence and conviction that you’re on the right path to a secure financial future. With retirement scenario modelling we were able to explore all our vital questions, which helped us to visualize the trade-offs and adapt strategies.
Ongoing Financial Monitoring: Tracking income, expenses, savings, and investment performance provides an overview of your current situation and can identify problems or opportunities.
Comprehensive Reporting and Planning: Detailed reports provide transparency, and task lists help you move forward on your journey.
Investment Advising and Support: Learning about the basic elements of investment can help you act.
Financial Education: Being informed of the ups and downs of the markets and of financial methods increases resiliency.
A robust retirement plan involves several income sources. This distribution is often made up of: Social Security benefits, company pension benefits, portfolio income via dividends and interest, insurance policy income (or existing annuity), passive income from property rentals, government retiree pensions, retirement account RMDs, and any private asset dividends.
Further considerations in retirement are health care costs, where MediGap insurance is often required to cover areas not paid my Medicare. Supplemental insurance in the form of Part A and Part B must be evaluated from a cost-benefit standpoint relative to your budget.
The financial fitness evaluation helps determine importance, savings adequacy, sustainable withdrawal rates, impacts of retirement ages, of inflation and of health expenses.
BIG PICTURE
Planning for financial health is a search for peace of mind; it is the crucible which, by being inexorable, is a dynamic system which adapts to the events of life and to the shifting phases of the economy, reducing the risk and making the long journey the way of well-being. To embark upon it is to step out on an uplifting course towards lasting success and tranquility.