Financial Planning: Do you D.A.R.E.?

As the end of the year draws near, let’s place a spotlight on the importance of financial planning. Due to varying circumstances, many of us do not know if we are prepared for retirement, and as a result, may be playing catch-up when it comes to investing for retirement and other long-term financial goals.

Life expectancy in the US has increased around to around 80 years of age. This longevity, along with potentially volatile financial markets and life’s uncertainties, translates into changing questions and complexities regarding our future. Having the resources to achieve your long-term goals and support those you love, depends on making sense of that complexity, which you can start to address via financial planning. 

Financial planning can seem like an overwhelming project, so here are some tips to help you simplify achieving your financial goals:

1. Determine your retirement assets. As you progress through your career, watch your family grow, and retire the way you’ve always dreamed, it is likely that you'll have to make adjustments to your portfolio along the way. You should develop a system with your financial advisor to periodically review the investments you've chosen and make sure they are still an accurate reflection of your current and future financial goals, risk tolerance and time horizon. 

2. Assess your income tax picture. You may be able to reduce your tax burden, sometimes significantly, by making strategic tax decisions before the end of the year. Your tax professional can alert you to any tax planning strategies that might make sense for your situation. 

3. Review critical documents. Because life's circumstances continually change, you should review your legal documents and beneficiary designations every year. This will entail combing through any wills, trusts, retirement plan documents and life insurance policies to make sure they are up-to-date. Seek the assistance of a qualified advisor if any modifications are necessary. 

4. Establish goals for next year and beyond. A year-end review is an excellent time to start thinking about next year and setting or revisiting long-term goals. Take a close look at your day-to-day finances to see if you can reduce expenses and save more. Then assess which of your goals are most important to you and commit to accomplishing them.

Financial planning is a lifelong endeavor.  Make sure you have a trusted team of advisors to help you in achieving all of your goals. 

Madison Carter is a Financial Advisor with the Wealth Management Division of Morgan Stanley in Denver. She can be reached at 303-316-5169 or Madison.anne.carter@morganstanley.com. ​