Sometimes one of the hardest parts of financial planning is getting started. The average investor has saved and accumulated a variety of financial and insurance accounts over the years. Putting it all together can seem like a daunting task. But it is important to take time to create a financial inventory to eliminate inefficiencies and keep everything up to date. The way to get started is to map out the financial plan in a few easy steps by creating an inventory and action plan.
Organize all of the financial accounts and documents and take an inventory of everything. The inventory should include all of the personal information for the individual and his or her spouse, such as name, date of birth and Social Security number. It is also helpful to gather all of the personal information on the children as well as their addresses, as this will often be used for updating the beneficiary forms if needed. Then organize the documents into file folders in the following categories, investment statements: company benefits, taxes, estate plans, insurances, and miscellaneous. 
Make a note in each folder as to the last time a comprehensive review was done on each category. If there is a specific purpose or a concern about any financial account, make note of that as well.
The next step is to take all of the information gathered in the inventory and put together a one-page summary. The goal of the summary is to have a quick, handy reference guide that gives the average investor a good overview.
The sections to include on the summary are current investments; current and future income sources and needs; tax distribution of the accounts between taxable, tax deferred and tax free; and current insurances. Next to each investment and insurance account, put the account numbers and where the account is held.
Also include whether the account is safe or risky.
Now start to put together an action plan on items that need to be addressed. Look for opportunities and/or threats. When I create action plans, I separate observations into categories for investment planning, tax planning, estate planning, insurance planning, liabilities and any miscellaneous items. The investor can use the one-page summary to take a look at how much risk they are taking, how much money they have in each tax category and what type of income needs there will be in retirement, as well as making sure the surviving spouse is protected in the event of a premature death.
The person creating the financial inventory and map should now go back and look at each folder that was created when they were organizing their documents. Review any notes in each folder and put those notes on the main action plan.
As the person reviews each folder for more action items, a thorough review should be done on the current investment fees and expenses as well as the current yield on the accounts. Review the beneficiary designations on all financial and insurance accounts. Be sure to include the beneficiary’s full name, date of birth, Social Security number, physical address and the exact percentage you are leaving that person. As these items are discovered, include them on the one-page summary.
At this point, the average person should have a pretty good overview of their entire financial picture, a detailed inventory along with a one page summary and a list of action items to address.
If several items are listed on the action plan, prioritize the list and set deadlines to get each category accomplished. We recommend that the individual or family work on one section at a time. For example, complete all investment planning action items before moving on to estate planning.
Now all you need to do is take action!
For more information about The Retirement Guys, tune in every Saturday at 1 p.m. on 1370 WSPD or visit www.retirementguysnetwork.com. Securities and Investment Advisory Services are offered through NEXT Financial Group Inc., Member FINRA / SIPC. NEXT Financial Group, Inc. does not provide tax or legal advice. The Retirement Guys are not an affiliate of NEXT Financial Group. The office is at 1700 Woodlands Drive, Suite 100, Maumee, OH 43537. (419) 842-0550.
