What Is Goals-Based Planning?

What Is Goals-Based Planning?

by Montgomery Gossen on August 16, 2017 The All-Weather Investor

At BCM, we take a Goals-Based approach to financial planning for your retirement. What does this mean? Simply, we believe that goal-based planning should always start with understanding where you want to be financially down the road, what’s important in your life and only then create strategies to reach those aspirations.

When considering your investments, debts, insurance, social security, inflation, and other elements, those factors can generate a myriad of solutions, making it hard knowing which scenario is best. Putting your goals first leads to a deeper analysis by prioritizing your preferences, which then allows us to organize the solutions.

Furthermore, goals-based planning also help you stay on track during the toughest of times. It allows you to take your eye off the meaningless short-term machinations of the markets. Financial planning attempts to model what your financial future might hold by making reasonable assumptions on taxes, performance returns,and inflation. Of course, we try to make our assumptions as accurate as possible, but the truth is that those assumptions will change. What happens if you experience another financial crisis? If you lose your job? By always having our goals front and center, this keeps us focused and doesn’t let the tail wag the dog.

A goals-based approach gives your plan a higher purpose which is, how do you want to live your future life? This roadmap for your financial life should motivate you to stick with your plan in both the good times and the bad. After all, if we do not fully understand you, how can we possibly make recommendations that are in your best interest?

If you would like more information on financial planning, please give us a call.