What is a Financial Plan

By Katherine Vessenes, JD, CFP®, RFC


A financial plan is a written road map that takes you from today, to where you want to be in the future. It identifies your financial gaps, and makes recommendations on how to overcome the gaps.

 A financial plan may consist of all or some of the following:

1.    Your financial goals and concerns

Every one of our financial plans starts with you. It is all about your goals, your concerns and where you would like to be financially in the future.

We take into consideration your current financial situation, including your income, debts and expenses. We also look at your investments in each of the three taxable pockets: taxed now, taxed deferred and tax efficient. Because as my daddy used to say: it is not how much you make, it is how much you keep that makes a difference.

2.    Examine your present financial situation

In order to map out your financial future, you'll need a clear picture of your current financial situation. This will include your income, debts, taxes, expenses and company benefits.

3.    Each plan will then address all four financial cornerstones:

  • Building Wealth

  • Protecting Wealth

  • Distributing Wealth

  • Transferring Wealth

4.    Building wealth in a tax efficient manner

In today’s environment, it is not enough to build wealth. We have to do it in a way that doesn’t make Uncle Sam your senior partner in retirement or a co-beneficiary at your death.  Taxes are part of every financial decision.

5.    Protect what's important to you

Most doctors who visit with us, are concerned about protecting someone. Many are concerned about protecting their spouse or family in the case of an unexpected death or illness. A financial plan will look at your exposures and see if there is a way to mitigate this risk, so you can sleep a little better at night.

6. Taking money out of your retirement plans in a tax efficient manner/distributing your wealth.

Unfortunately, many of our doctors come to us with a plan to build wealth, but not a plan to pull money out during retirement. If they are relying on pension plans or their pre-tax 401k for retirement income, they are in for a big shock, as this money has never been taxed. They don’t have as much money in their retirement accounts as they think they do.                                                   

Every financial and retirement plan should cover how to pull money out of tax-deferred plans in a way that minimizes taxes giving you more money to live on in retirement.

7.    Transferring your estate and leaving a legacy

Many of our doctors are concerned about leaving a legacy. They want to provide for their heirs or favorite charity. If this is important to you, we should cover it in your financial plan.

8. Recommendations

Every solid financial plan should also include specific recommendation on how to fill in the gaps and make your financial future better.

If you would like a second opinion on your finances or current plan for your financial future, please give us a call today: (888) 256-6855.

Katherine Vessenes, JD, CFP®, RFC, is the founder and CEO of MD Financial Advisors who serve 500 doctors from Hawaii to Cape Cod. An award-winning Financial Advisor, Attorney, Certified Financial Planner®, Registered Financial Consultant, author and speaker, she is devoted to bringing ethical advice to physicians and dentists. She can be reached at Katherine@mdfinancialadvisors.com.