Many people believe they already have a financial plan. They might have investments, a budget, a report with graphs and someone who helps manage their portfolio. But a comprehensive financial plan is much more than that.
When done properly, it brings together budgeting, long-term planning, tax strategy, retirement income optimization, risk management, estate planning, business planning and even philanthropic goals into one coordinated roadmap.
In the simplest of terms, a financial plan is the bridge between where you are today and a vision for your life in the future.
Without this, even successful individuals, families and business owners may face unnecessary uncertainty and missed opportunities to make the most of what they’ve built.
In fact, research shows that a quality financial plan can contribute up to 3.52% annually to your wealth. (1) Over time, that can make a difference in the lifestyle you expected to have.
Below are a few common scenarios and the planning decisions that can shape better outcomes.
1. “We Thought We Were Doing Fine”
We always felt we were on track. We were saving and our investments were growing. But we had no idea if we had enough to put the kids through school or to cover our retirement expenses.
By stress-testing our plan against potential career shifts, market volatility, and unexpected costs, our planner helped us understand the impact of today’s decisions and how to stay on track.
2. “I Didn’t Know If I Could Afford to Retire”
As retirement approached, I was worried about how my pension, investments, CPP and OAS worked together. Would I run out of money? Would taxes eat into my income and the life I worked hard for? Would I lose my OAS?
Working with a planner to coordinate the timing of withdrawals, review tax impact, and stress-test under different market conditions gave me more confidence that I could retire safely.
3. “I Didn’t Realize What Might Happen If Something Went Wrong”
I had insurance policies through work and assumed that it was enough, but I hadn’t looked at what might happen if I became ill, disabled or passed away unexpectedly.
Reviewing the potential impact on my family showed me gaps that I hadn’t considered and helped me understand how insurance fits into my overall risk and long-term plan.
4. “My Business Was My Retirement Plan”
As a business owner, most of my wealth was in my company, but I never considered in detail how or when I could turn that value into retirement income.
Exploring succession options, reviewing tax implications, and building projections based on different exit scenarios during the financial planning process, helped me see my business in combination with my broader financial picture,
5. “I Didn’t Realize What Estate Taxes My Family Might Face”
I had a will but I didn’t fully consider how my family would pay the taxes that might apply to assets like our cottage or investments. Working with a planner to estimate potential taxes and make sure there was enough liquidity to cover them, gave me confidence that my wishes would be respected and stress for my family minimized.
6. “We Realized We Had More Than Enough”
After running projections, we realized we were likely to have more than enough for retirement and for our children. That clarity of having a plan around our financial future gave us the confidence to structure our giving, reducing our income taxes while supporting causes we love.
Everyone’s goals and circumstances are different. And those circumstances will absolutely evolve over time. That’s why a quality plan isn’t something that is done once. It’s a living, breathing roadmap.
If you don't have a plan in place, are unsure whether your current plan connects all the pieces or you think it might be time for an update, the first step is a conversation with a financial planner. They can help you see where you stand, where you’re headed, and how to align your plan with the life you want to build.