My best workout weeks are the ones when I write in my calendar what I'm going to do that morning. Monday is a 3-mile run. Tuesday is plyometrics. The point is that there is a plan, and if I write it down, I almost always follow it.
The great irony of financial "plans" is that they are the only plan I have come across that isn't actually a plan. In fact, a plan tells you, "Do this, then do that."
But most people don't have a written financial plan that spells things out for them like that.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
So, what could your financial plan be missing?
Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.
1. It's missing an actual plan
Picture this: You've visited your financial adviser and left with a stack of papers filled with numbers and charts. This "financial plan" is basically 100 pages of documents, with the first page telling you whether you have enough for your stated goals. The next 49 pages are cash-flow projections to back up that first page. The final 50 pages are disclosures.
I sort of understand this from a technology and practitioner's perspective. Personal finance is quite personal. Tom and Betty and Carol and Ben may want to retire this year and spend $12,000 per month.
But based on their values, goals, risk tolerance, health, etc., their financial plans should be vastly different. Their decisions and actions are not going to look the same.
In financial planning software, you can adjust spending, retirement age, asset allocation, etc. But none that I have found will spit out a set of instructions based on that. That's the role of your adviser.
In the software we use in my practice, I have a one-page summary called a "dashboard" that I customize with text boxes and to-dos to give our clients an actual plan.
After all, if you go to a personal trainer, you probably want them to tell you what to do.
You can access the free version of what we use online.
2. It's missing a tax and estate strategy
These two areas are widely overlooked by advisers. Unfortunately, this type of planning often comes with much more definitive results than does tweaking a portfolio.
A tax plan for the retired clients we work with has the ultimate goal of reducing their lifetime tax bill. It seeks to realize income when rates are low and defer income during high years. It also weaves its way into portfolio structure, charitable giving and withdrawal strategies.
An estate plan in this context is different than a set of documents, though you still need those documents. You should have a strategy to ensure that your beneficiaries and documents are aligned and that both reflect your wishes.
If you have a taxable estate, it should include strategies to mitigate the tax impact of your passing.
Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.
Financial planning software is getting better in these two areas, but other parties have started to fill the gaps. Holistiplan tax planning software allows financial professionals to model and calculate the benefits of various tax plans.
An estate planning software called Vanilla will read your documents, tell you what they say in plain English and then show you the impact of adjustments.
3. It's missing answers to the big questions
Planning software, probably from a liability perspective, is not binary. It is not designed to give red lights or green lights on goals: Yes, you can retire. No, you can't take that trip.
If you're a DIYer using your software, you will have to have a good enough understanding of the inputs and outputs to make decisions based on a Monte Carlo simulation.
If you are paying an adviser, that's their job. If they can't or haven't told you whether you can afford to retire, afford to help your adult children, afford to take that trip, it may be time to find someone who will.
Related Content
- Estate Planning for Millionaires
- Three Pros (and Four Cons) of Hiring Multiple Financial Advisers: The View From a Financial Adviser
- What Is the Magic Number to Retire Comfortably?
- Timing Your Retirement: A Financial Professional's Guide on When to Say When
- Three Steps to Simplify Paying Your Taxes in Retirement
-
10 Areas With the Highest Energy BillsEnergy prices keep rising. Discover the reasons behind the hikes, the areas most affected and how you can save on energy costs.
-
A Retirement Guide for Solo AgersIf you’re single without adult children to rely on for help, planning for your older years requires an added layer of intention and urgency.
-
A Retirement Guide for Solo Agers
If you’re single without adult children to rely on for help, planning for your older years requires an added layer of intention and urgency.
-
I'm a Financial Planner: To Beat Inflation and Build Wealth, This Is the Strategy You NeedIf you want to build long-term wealth, there's a tried-and-trusted strategy, and it starts with recognizing the inflation-busting power of equities.
-
I'm the CEO of a Credit Union: This Is What We Do to Earn Our Members' TrustWhat people want most from their financial institutions is a financial partner that listens, responds and acts with their best interests at heart.
-
Sharpening Your Focus: 'Hone' Authors on How Leaders Can Keep Their Businesses on TrackBusiness owners like this chef could learn valuable lessons from 'Hone,' including how caving in to pressure to quickly expand could lead to business 'drift.'
-
Dow Falls 557 Points to Start NVDA Week: Stock Market TodayThe Oracle of Omaha saw growth and value in certain corners of the stock market during the third quarter.
-
Nvidia Earnings: Live Updates and Commentary November 2025Nvidia's earnings event is just days away and Wall Street is zeroed in on the AI bellwether's third-quarter results.
-
What You Will Pay for Medicare in 2026Medicare premiums for 2026, as well as the costs of Parts A, B, and D, have increased. Here is how much you'll pay in 2026.
-
Your Four-Step Guide to True Financial Freedom, From a Financial PlannerYes, you can achieve financial independence, even if it seems elusive. While it may not be an easy journey, these are the steps to get things rolling.
