You're fast approaching the time when you thought the most stressful decision you would make would be whether to book a tee-off time or go for a walk.
Then you took a long hard look at your financial portfolio – and discovered that retirement might be farther off than you'd hoped.
And no wonder. Boomers are living longer, healthier lives than any generation before us and that means our savings have to last longer, too. Add to that the challenges of supporting aging parents who may not have put enough away either, and kids who are finishing post-secondary education with student debt and an uncertain job market, and is it any wonder we're asking: Will I ever be able to retire?
Financial planning focuses on the big picture: your lifestyle, your priorities and the money you need to enjoy one and realize the other. Financial plans include every area of your financial life, from investments to tax planning, insurance needs and retirement goals, and ensuring your estate is looked after so that you can balance what you need now with what you want down the road.
Here's how it works:
A financial plan considers much more than your RRSPs.
1. A CERTIFIED FINANCIAL PLANNER® professional starts by helping you focus on your financial and life goals.
2. He/she looks at your financial portfolio and shows how a decision in one area impacts an outcome in another. For example, an investment decision could have tax consequences that negatively impact your estate plan, or saving for a child's education may affect your retirement goals.
3. Then your planner works with you to put the pieces together – like a jigsaw puzzle – so everything falls neatly into place.
Sound complicated? Not when you partner with a qualified professional.
It's important to note that not all people in Canada who call themselves a financial planner are certified, so be sure to check the credentials of the person you choose to help guide your journey. If they don't have the CFP® designation, they are not the planner for you. Those who have obtained and maintain this designation are held accountable to the most rigorous ethical standards in the profession and have proven their competency as your trusted advisor.
5 Steps to Partnering with the Right Financial Planner
1. DO YOUR HOMEWORK → Research financial planning terms and strategies so you engage in the process and know the questions to ask. Check out FinancialPlanningForCanadians.ca for more information.
2. KNOW YOUR FINANCIAL AND PERSONAL GOALS → Understand what matters to you, now and in the future.
3. UNDERSTAND FEE STRUCTURES → Planners are paid in a variety of ways: through the cost of products; a percentage of assets they manage on your behalf; or a fee-for-service based on an hourly rate or predetermined fee. Your CFP professional will explain in simple terms how you will pay for their services.
4. DEMAND COMPETENCE AND ETHICS → There are a variety of financial planner designations, including some that require only taking day or weekend courses. The CERTIFIED FINANCIAL PLANNER® designation recognizes strict education, experience, competence and ethics requirements, and CFP professionals must reconfirm a written code of ethics annually stating that their clients' interests will always come first. Don't settle for less.
5. STAY CONNECTED → Keep up a regular conversation with your CFP professional. A quarterly check in by phone, for example, or an annual meeting. Your needs may change and your planner needs to be kept in the loop.
To get your plan started and create the financial freedom you desire, visit findyourplanner.ca, where you will find a directory of CFP professionals in good standing in your area.
© Financial Planning Standards Council