OUR SERVICES Financial Planning The purpose of a financial plan is to help ensure that your overall financial life is structured to meet your personal goals now and in the future. These goals can include current income needs, retirement planning or saving for a large financial outlay such as a home purchase or a child’s college education. A plan will be created that will take into account the time horizon for your goals and your risk tolerance. SFM Financial Planning will create a well-diversified, low-cost portfolio tailored to your specific needs. Your financial plan will be monitored continuously to ensure that your investment portfolio is aligned with your life goals. Although the creation of an investment portfolio is critical to financial success, the plan doesn’t stop there. We will also ensure that your insurance needs are met and that you are properly set up for estate planning needs, such as wills, healthcare proxies and trusts. Portfolio Diversification Having a well-diversified portfolio is crucial to your financial success. Proper diversification lowers overall portfolio risk and enhances long-term returns. The first step in the process is to determine the proper mix of stocks and bonds that should be held in your portfolio. This will depend on your tolerance for risk and the time horizon for your portfolio. We will work together to determine the proper allocation of stocks and bonds. Diversification doesn’t end there. For the stock portion of your portfolio we will allocate the funds between U.S. and international markets. We will allocate these funds to asset classes broken down by market capitalizations (i.e company size). This will provide exposure to small, mid and large cap domestic and international stocks. Finally, we will review the benefits of tilting the portfolio toward a particular market style (i.e. value versus growth). For the bond portion of the portfolio, we will determine which types of bonds best suit you. For example, if you are in a high tax bracket in a high tax state it may benefit you to invest in municipal bonds. If not, a mix of corporate and treasury bonds may be more appropriate. All of these asset allocation decisions will depend on your specific circumstances. We will review your particular needs and tailor a diversified portfolio specifically designed for you. Once established, your portfolio will be monitored on a continuous basis and modified as needed. Retirement Planning A successful, comfortable retirement doesn’t just happen. It requires a well thought out plan that makes a realistic assessment of your current savings and what additional ongoing savings are necessary for you to meet your goals. SFM Financial Planning will work closely with you to complete a detailed cash flow analysis so that we can determine your current spending patterns. The cash flow analysis will pinpoint the amount of cash that comes in and the amount that goes out. Based on your current spending patterns and our estimate of your financial needs when you retire, we will determine the amount of savings you will need for retirement. Once we estimate your total savings needed for retirement, we will determine what you need to save annually in order to reach this goal. After all of this information is gathered, we will work together to create a financial plan that will put you on the path to a successful, comfortable retirement. Estate Planning This part of the planning process is designed to ensure that, upon your death, the maximum amount of your estate efficiently passes on to your designated beneficiaries. This can be accomplished by minimizing the taxes paid on your estate and eliminating or minimizing the need for probate court involvement. Estate planning also includes the need for a well-written will, health care proxy and power of attorney. It’s surprising how many individuals either don’t have any of these critical documents or have them but they are incomplete or outdated. We will ensure that your will is complete, accurate and up to date. A health care proxy designates an individual to make health care decisions on your behalf. This individual can only make these decisions if you become mentally incapacitated. The power of attorney gives legal authority to another person to make property, financial and other legal decisions under specific circumstances. We will ensure that you have what you need so that you are taken care of should unforseen events occur. Insurance Needs Part of planning for a successful financial future is the need to protect you and your family from catastrophic events that can leave loved ones in a financial bind. Based on your specific circumstances, we will review the appropriate types and amounts of insurance you may need. The types of protection needed may include life, home and disability insurance. Budgeting and Cash Flow Analysis A cash flow statement is designed to provide a clear picture of where cash comes in and where it goes out. SFM Financial Planning will work with you to complete a detailed cash flow statement. We will then hone the analysis by adjusting for the tax implications of some of the items (e.g. mortgage interest, real estate taxes, salary taxes). This will allow us to determine your after-tax cash flows. Once complete, we will analyze the cash flow statement and discuss any changes that can be made to your current expenditures. This review will provide the information needed to increase your excess cash flow in order to maximize the contribution to your savings. Saving for Major Expenditures Part of your plan may involve saving for a major future expenditure. You may be saving for a new home or your child’s education. Based on your current cash flows and the estimated future cash outlay needed, we will determine the required savings rate and the types of investment products best suited to meet your goals. For example, if you are saving for your child’s education we may recommend that you invest in a “529 Plan” which is a government-sponsored program that allows you to save for education on a tax advantaged basis. Depending on the state you live in, these plans vary in the types of investment products offered and the plan costs; this type of plan may or may not be appropriate for your particular situation. We will provide the analysis for this type of decision.