Do you need a Financial Physical?

How to make sure your portfolio stays fit.


It’s been said that there are seven pillars of good health, and they go way beyond just eating right and exercising. In fact, true wellness involves integrating seven important components: physical, emotional, relationship to self, social, spiritual, habits/actions, and financial.

All of these pillars support each other, so even if just one of them is off, it can have an impact on all of the others. With that in mind, a healthy retirement-savings plan should start with taking a financial physical. 

How Healthy Is Your Plan?

Getting a good baseline assessment of where your financial plan is right now can help point you in the right direction in terms of meeting your future objectives. Without taking a financial physical, though, you may not receive the right type of care.

In fact, even if you’re a good saver, it is necessary to have a “care plan” in place so that you’ll know you’re going in the right direction.

For example, if you have a variety of different investments in your portfolio, were these financial vehicles picked at random or purchased specifically to get you closer to your goals?

In addition to giving you a definitive direction, a financial plan can provide you with other benefits, such as:

• Protecting assets from various risks

• Reducing your future out-of-pocket healthcare and long-term care expenses

• Uncovering any shortfalls between anticipated future expenses and current income sources

• Allowing for more tax-efficient strategies

• Creating income that continues to flow for as long as you need it to.

Although setting up a complete financial plan may seem a bit overwhelming, the reality is that you don’t have to start out big. Just like the goal of attaining optimum physical health to run a marathon, you don’t start out running the whole 26 miles on Day One. Rather, you build up to it by going shorter distances and increasing them over time.

An experienced financial advisor can provide you with recommendations on how to get to where you want to go, based on where you’re starting from now. They can also act as your “trainer” to guide and motivate you throughout the planning process and beyond.

Preparing for Your Financial Physical

In order to develop a plan that is based on your specific needs and goals, it is important to prepare for your meeting with a financial professional. So prior to your appointment, make sure that you:

• Make a list of your current expenses and income generators, and distinguish between expenses that are needs versus those that are wants

• Discuss your current and future financial objectives and challenges with your spouse or partner. Make sure that you’re both on the same page!

It is also recommended that you gather some important documents and bring these to the meeting so the advisor can review them. These should include your:

• Most recent federal tax return

•401(k) and/or other retirement plan statement(s)

• Statement(s) from any personal savings and/or investment accounts

• Pay stubs

• Mortgage and/or other debt statements.

Insurance statements

Getting Regular Financial Checkups

Once your financial plan has been created, you shouldn’t treat it as a “set it and forget it” task. Rather, you should ideally review your plan every year or every couple of years. And if you incur any major life changes such as marriage or divorce, the birth or adoption of a child, or the purchase or sale of a business, your plan should be reviewed sooner. Leaving your original plan in place could cause you to unintentionally disinherit someone or benefit the wrong individual(s). For example, if your life insurance and/or retirement account(s) still have an ex-spouse or partner listed as the beneficiary, that will likely need to be changed.

With that in mind, it is essential to ensure that all of your beneficiary and “transfer on death” (TOD) designations are up-to-date, and that the financial plan is properly set up for any new goals and objectives you may have.

Next Steps toward Healthy Finances

Just like developing your ideal plan for nutrition and exercise, everyone needs to have a plan that fits their unique financial and retirement needs. What may work for a friend or family member may not necessarily be right for you.

The first step toward attaining and maintaining a healthy financial life should be to talk with an advisor who can review your current plan and objectives, and from there develop a roadmap to address your short- and long-term needs.

Working with an LGBTQ or LGBTQ-friendly advisor can further ensure that your financial plan is up-to-date with regard to tax, inheritance, and other rules pertaining to same-sex spouses and partners. 

This article appears in the September 2020 edition of OutSmart magazine.


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Grace S. Yung

Grace S. Yung, CFP, is a certified financial planner practitioner with experience in helping domestic partners plan their finances since 1994. She is a principal at Midtown Financial LLC in Houston and was recognized as a “Five-Star Wealth Manager” in the September 2017 issue of Texas Monthly.

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