A Sample Financial Plan
Key Points – A Sample Financial Plan
- The Advantage Offerings Suite
- Case Study Sample Financial Plan
- Strategic Plan Enhancements
- 4 Minute Read
A Sample Financial Plan
At Modern Wealth Management, we believe that a truly effective financial plan goes far beyond just budgeting or investing. Our Advantage Offerings encompass a comprehensive suite of services designed to help you pursue your financial goals more efficiently and gain confidence, freedom, and time. We’ll cover these in more detail as we discuss this sample financial plan.
Our Advantage Offerings include:
- Financial Planning: A personalized roadmap to help you work toward your life goals.
- Investment Management: Strategies aligned with your risk tolerance and objectives.
- Tax Planning: Potentially minimizing tax liabilities through proactive strategies.
- Insurance Planning: Helping to prepare you for life’s uncertainties.
- Estate Planning: Preserving your legacy and protecting your loved ones.
Together, these services form the foundation of a financial plan—one that adapts to your life and evolves with your goals.
Meet Steve and Stacy: A Financial Planning Case Study
To illustrate how these services come together, let’s explore a real-world example from one of our workshops. Steve (60) and Stacy (58) are a married couple living in Michigan. They’re approaching retirement and want to ensure they can enjoy the wealth they’ve built without financial stress.
Step 1: Understanding Their Financial Picture
Steve and Stacy’s financial profile includes:
Source: https://rightcapital.com
- Income: Steve earns $125,000/year; Stacy earns $50,000/year.
- Social Security: Steve expects $3,500/month; Stacy expects $2,500/month at full retirement age.
Source: https://rightcapital.com
- Pension: Steve will receive $1,000/month upon retirement.
Source: https://rightcapital.com
- Assets: $1.3 million in retirement and brokerage accounts, plus $50,000 in cash savings.
Source: https://rightcapital.com
- Home: Valued at $600,000 with a $100,000 mortgage at 3.5%.
- Expenses: $48,000/year in basic living expenses, $10,000/year for travel, and healthcare costs based on national Medicare averages.
Step 2: Setting Goals
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Their goal is to retire in five years—Steve at 65 and Stacy at 63. They also want to explore: Retiring earlier
- Optimizing Social Security timing
- Reducing taxes in retirement
- Leaving a meaningful legacy
Step 3: Analyzing the Current Plan
Source: https://rightcapital.com
Using advanced financial planning software, we ran a Monte Carlo simulation to assess their probability of success—the likelihood they won’t run out of money in retirement. Their current plan scored 89%, indicating strong financial health.
Step 4: Improving the Plan
We proposed several enhancements to increase their financial confidence and long-term success:
- Optimizing Social Security
- Delaying benefits beyond full retirement age allows Steve and Stacy to earn delayed retirement credits, increasing their monthly income for life.
- Roth Conversions
- By converting some traditional IRA and 401(k) assets into Roth IRAs, they reduce future required minimum distributions (RMDs) and create a more tax-efficient legacy for heirs.
- Estate Planning
- Steve and Stacy don’t have children, so their estate plan includes charitable giving and support for extended family. We ensured their beneficiary designations, wills, and trusts were aligned with their wishes and optimized for tax efficiency.
- Insurance Review
- We evaluated their existing insurance coverage to ensure they’re prepared for unexpected events. This included reviewing life insurance, long-term care, and umbrella liability policies to assess potential coverage needs.
- Investment Strategy
- Their portfolio was reviewed for risk alignment and diversification. We recommended a shift toward more income-generating and tax-efficient investments as they near retirement.
Step 5: The Results
Source: https://rightcapital.com
With these adjustments, their probability of success increased to 92%. More importantly, their ending portfolio value improved in both size and tax efficiency—leaving more Roth assets and fewer taxable dollars behind. They also avoided unnecessary RMDs, reducing their taxable income in retirement and preserving more wealth for their legacy goals.
Why a Comprehensive Financial Plan Matters
A financial plan is more than a spreadsheet—it’s a strategy for living the life you want. Whether you’re nearing retirement or just starting out, a personalized plan helps you:
- Understand your current financial position
- Set and achieve meaningful goals
- Make informed decisions about savings, taxes, and investments
- Protect your family and legacy
Ready to Build Your Plan?
At Modern Wealth Management, we’re here to help you take the next step. Start by gathering your financial data, then schedule time with our Concierge Deskt today. Together, we’ll create a plan that reflects your unique goals and helps work toward live the life you envision.
Sources:
Investment advisory services offered through Modern Wealth Management, Inc., a Registered Investment Adviser.
The views expressed represent the opinion of Modern Wealth Management a Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.
Investment advisory services offered through Modern Wealth Management, Inc., a Registered Investment Adviser.
RightCapital is a financial planning software that integrates retirement, tax, investment, and estate planning, allowing advisors to create personalized plans based on client data. It uses scenario modeling to project future outcomes, incorporates tax-efficient strategies, and tracks progress over time. The software considers a limited set of asset classes, such as U.S. Large Growth, International Equities, Emerging Markets, Bonds, and Cash, which are broad categories and not specific securities or products. These asset classes are not exhaustive, and other investments with similar or superior characteristics may exist. Assets not classified into these categories are grouped under “Other.” RightCapital cannot guarantee a complete or accurate depiction of a user’s financial situation or goals. In its Monte Carlo Simulation, asset classes are grouped into six categories with estimated return assumptions based on historical index data, not actual investments.
This case study is hypothetical and does not involve an actual Modern Wealth Management Client. It is for illustrative purposes only and should not be construed as a guarantee of future results. Outcomes may differ based on individual circumstances, assumptions, or changes in laws and markets. Past performance of indices does not guarantee future results, and no investor has achieved the exact performance shown. Tax strategies discussed are general in nature an may not be suitable for all clients. Please consult with a tax professional before implementing any strategy. Modern Wealth Management and RightCapital are separate and unaffiliated entities.
This article utilizes RightCapital software. Please note that Modern Wealth Management LLC and RightCapital are separate and unaffiliated entities. The data presented is believed to be sourced from reliable and reputable sources, though it should not be interpreted as a recommendation to buy or sell any security, strategy, or investment. The information provided is for general informational purposes and should not be construed as financial, tax, or legal advice specific to your individual situation. Your financial outcomes may differ based on a variety of factors, including but not limited to your unique investment portfolio, actual returns, income levels, tax circumstances, investment objectives, and goals.
The analysis provided is based on hypothetical assumptions, and past performance or historical data is not necessarily indicative of future results. Therefore, any example provided in this article is purely illustrative and should not be taken as a guarantee of future performance or outcomes. Modern Wealth Management offers financial advice only to clients with whom we have a formal agreement to provide such services. Please note that financial situations vary widely from person to person, and outputs from this tool may change based on individual inputs, the nature of the investments considered, and other factors. We strongly encourage you to consult with a qualified tax, financial, or legal professional before making any decisions or taking any actions based on the information presented in this article.