1. Tax Planning
Tax planning is important for all people, regardless of their tax bracket. Life events, whether that’s selling a house, getting a new job or getting married, can bring changes to people’s taxes. Most people don’t plan these events based on how it will affect their taxes, but they can benefit from knowing how life changes can impact their finances.
As a financial planner, it’s important to be able to provide guidance to those who may experience tax changes and want to better understand what that means for their finances.
2. Asset Allocation
Ever heard of the famous saying “Don’t put all your eggs in one basket?” Well, this applies to the asset allocation aspect of financial planning. Someone’s assets are their investments and, if they have more than one investment, it’s important they know how to distribute their money to ensure the greatest return. Many investments are made with the intention of providing a comfortable retirement.
3. Retirement Planning
In 2011, 68 percent of the working-age population (25-64) in the U.S. did not participate in an employer-sponsored retirement plan because they weren’t sponsored, didn’t participate or weren’t working. This retirement crisis is problematic because Social Security cannot fully replace income in retirement. With so few Americans taking action early to plan for their retirement, taking the steps to plan seems more important now than ever before.
As a financial planner, you can help people take advantage of their employer-provided retirement plans and ensure their financial security down the road.
4. Risk Management
Risk is an inevitable part of life. But one thing people can do is account for any potential risks or uncertainties in their investments. For example, the Environmental Protection Agency requires companies that deal with hazardous materials develop a risk management plan to address the steps they are taking to avoid risk and determine what they will do if there is an accident.
5. Estate Planning
It’s important for financial planners to understand all that goes into estate planning. And no, estate planning is not only for the wealthiest of people. It’s meant to protect families if something happens to a family member. However, 55 percent of Americans don’t have a will. Instead of someone leaving their family vulnerable to legal issues, estate planning can allow them to determine how their assets are distributed and ensure their family is taken care of.