What Is a Comprehensive Financial Plan?

Do you take a comprehensive approach to planning your finances?

Lars Larsen
Financial Adviser in Burlingame, CA

What Is a Comprehensive Financial Plan?
July 12, 2018

If the answer is no, you’re not alone. According to a study from the Certified Financial Planner Board of Standards, only 19 percent of Americans could be classified as “comprehensive planners.” The remaining 81 percent either plan only for specific financial goals or don’t do any planning at all.*

A comprehensive financial plan is one that addresses your entire financial picture. It may include everything from retirement planning to investment management to risk management and much more. A comprehensive plan is often helpful because it can show you how financial decisions in one area of your life can impact goals in other areas of your financial life.

For example, you may have a plan for retirement. But do you know how your efforts to save for retirement impact other goals, such as saving for your child’s education or paying down high-interest debt? A comprehensive plan shows you the interaction between these goals so you can make more informed decisions.

Not sure whether your plan is comprehensive? Below are some of the elements commonly found in comprehensive financial plans. If your financial plan doesn’t include these elements, and possibly more, then you may need to re-examine your financial strategy from a more comprehensive perspective.


Objectives and Goals
Perhaps one of the most helpful aspects of a comprehensive financial plan is that it helps you prioritize and clarify your goals. If you’re like many Americans, you probably have many different financial objectives. For example, you may have goals for retirement, your child’s education, travel or some other large purchase.

How do you decide which goals to pursue and which not? How do you know how much money to allocate toward each objective? When you develop a comprehensive financial plan, you spend time examining each of these goals to determine how they should be prioritized. That helps you make more informed decisions about how to save.


Cash Flow
Think of cash flow as the fuel that powers your financial plan. You can use your free cash flow to save for retirement, pay down debt or pursue your other financial objectives. In your financial plan, you may develop ways to help you maximize your cash flow, such as eliminating high-interest debt or implementing a budget.


Investment Policy
There’s no single investment strategy that’s appropriate for everyone. Rather, your investment strategy should be based on your unique goals, needs and risk tolerance. Your comprehensive financial plan will likely include a section dedicated to investment strategy. You can then use that document to guide your investment-related decision-making in the future.


Retirement Planning
Retirement planning is a top financial priority for many Americans. After all, by the time your career is over, you likely will have spent decades in the working world. Retirement is your opportunity to take back control of your schedule and live life without the limitations that come with a busy career.

But how do you know if you’re saving enough money to find the type of retirement you want for yourself? How much money do you need to have saved? How will you pay for health care costs in retirement? What is your contingency plan if you are forced to retire early?

The retirement planning section of your comprehensive financial plan will answer these questions and many more. Once you take the mystery out of retirement planning, it becomes much easier to pursue your goals.


Estate Planning
It may not be pleasant to think about your own death. However, it’s an important part of financial planning. You may have loved ones who are dependent on you financially. Or you may want to leave a legacy for your children, grandchildren or other family members. The estate planning component in your comprehensive plan helps you determine which tools and strategies to implement to protect your legacy.

This is just a sampling of some of the elements that may be included in your comprehensive plan. Your plan will be based on your unique goals and needs.

Ready to develop your comprehensive financial plan? Let’s talk about it. Heritage Financial North can help you analyze your needs and create a strategy. Let’s connect soon and start the conversation.


*http://www.cfp.net/docs/public-policy/2013-fin-pla...

Advisory Services Offered Through Change Path LLC, a Registered Investment Advisor. Heritage Financial North and Change Path LLC are not affiliated.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.


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