Happy Fall Signature of Solon Residents!! The air is getting crisp, Football is on our mind, and October provides many scares. As we enjoy the frights and scares of Halloween month, don’t let your finances become a frightening situation for you. October is not only peak leaf color and ghosts everywhere, it is also Financial Planning month. Our team at Redwood Financial Network believes deeply in the road mapping of your future. However, our experience shows, many people don’t understand what a financial plan offers.  Let’s take a look and understand why it’s imperative to have a sound financial plan.

First and foremost, a financial plan addresses many areas of financial well-being. It is not simply retirement savings as many people think. The primary subject areas which need to be addressed for a concise financial plan are listed below:

1.       Financial statement preparation – The first step in meeting with clients is reviewing the overall cash flow of the household. During this step, the financial planner will analyze cash flow and help determine a budget. Comparing all sources of income versus all sources of outflow is the first and most basic step to financial awareness. This is the starting point for a plan development.

2.       Insurance planning and risk management – Every client should analyze their insurance plan and review annually. Changing circumstances create different insurance needs and it should be assessed and reviewed annually. Insurance planning is a very important piece of the plan as it is used to protect your assets and family. Assessing your insurance needs are a very important part of the financial planning process.

3.       Employee benefits planning – Many individuals have jobs that provide some type of employee benefits. A financial planner can review these benefits to see how they fulfill needs in the overall financial plan (e.g. health insurance, disability insurance, life insurance, retirement savings, etc…). It is a good idea to discuss your benefit selections with your financial planner to confirm all avenues are working together.

4.       Investment planning – The investment plan addresses the proper placement of funds into investment vehicles based on investors future goals, time horizons, and priorities. This step will determine level of risk of investment vehicles as well as liquidity and historical return.

5.       Tax planning – Tax planning is the analysis of the financial picture from a tax perspective. Tax efficiency is reviewed during this step to make sure the items in the financial picture are working together in seeking to reduce the most taxes.

6.       Retirement planning – Retirement planning analyzes the preparation for future retirement. Based on current assets, years to retirement, rate of saving, and historical return rate the financial planner will suggest contribution rates and accounts to pursue the retirement goals.

7.       Estate planning – Generally the last step of financial planning is estate planning. Once the assets have been directed through budget, protected through insurance planning, and allocated to various areas in the retirement plan, the individual needs to anticipate and arrange for the disposal of the assets at the end of their life. A financial planner can guide them to proper titling and placement of assets for disposal upon death.

A financial plan is a working document. Life changes constantly and so does your financial situation. The achievement of goals needs to be guided for most efficient completion. A plan will provide guidance for awareness and placement of funds. At a minimum, annual evaluation is recommended to assess the need for changes. Major life changes (marriage, new child, job change, etc) are triggers for examination of your financial plan to address necessary changes in the future goals and plans.

If you are currently taking these steps, congratulations!! If you haven’t constructed a plan or just aren’t quite sure if yours is sufficient, schedule a 15-minute consultation with our team.  We’d love to work with you and see how we can help.


Redwood Financial Network is an independent wealth management firm headquartered in Solon. Our community involvement has led us to an exciting new partnership with your Signature Life publication.  Each month be sure to flip to our page to see what’s new and gather some tips that you can use to manage your financial life.  Between Covid-19, changing presidential administration, job changes, and the Browns finally being good, things feel different.  Life in these unprecedented times have likely prompted many new questions.  That is especially true when we think about our finances. If there is a topic you would like to learn about, let us know!  If you have any financial questions, we want to hear them!

We look forward to a great relationship with your terrific community.

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