We all seek financial independence in our lives. In order to understand what the financial independence means to an individual or a family, it is very important to create a lifetime financial plan. The first step to financial planning is to understand where we stand today financially, and where we are headed. To understand the present, we need to do a comprehensive financial health check up first. The Personal Financial Index® tool from Omyen Corp. is a free and privacy protected tool to perform this checkup. In just ten minutes or so, this intuitive and privacy protected tool allows you to run your financial health diagnosis.
Much like a routine physical checkup, the PFI based financial health checkup establishes a baseline for your financial planning. You get to learn about your net worth, savings discipline toward future financial goals, and the level of insurance protection you need for your loved ones. Armed with this vital information, you can either work with a qualified financial advisor near you, or if you are financially proficient and your financial needs are rather straightforward, you could create a financial plan for yourself. Below are some very useful resources in maximizing the benefits of financial planning.
As discussed above, the financial planning is very important to achieve the financial independence. But let's also understand why there is no other way to achieve the financial independence. As an example, according US Census about 10,000 people retire every day. That means about 3.6 million retirees every year. According to Employee Benefits Research Institute, 60% percent of workers report that the total value of their household's savings and investments, ixcluding the value of their primary home and any defined benefit plans, is less than $25,000. Consider the inflation, rising cost of healthcare, and people living a lot longer than their predecessors, and you have a major financial crisis. A majority of people think that the Social Security would provide enough income during retirement. First of all, Social Security payout is linked to your income during working years and currently the maximum payout is about $2,500 a month. Secondly, the future of Social Security past a couple of decades is questionable. To top it all off, the healthcare cost continue to increase at more than double the regular inflation rate. Many people think that Medicare will take care of their healthcare during retirement. On an average Medicare covers only about 50% of the healthcare cost. Many retiree healthcare surveys point that a couple retiring today would need at least $250,000 out of their pocket for the healthcare during retirement.
Other than retirement, we also need to make sure that before retirement we have enough money for any emergencies, saved some money for kids' college education, and protected our loved ones from any financial risks. Therefore, it is extremely important for all of us to have a financial plan. A financial plan is an important roadmap for our lives.
Once you or your financial advisor has developed a financial plan, the most important thing is to keep track of the plan. Financial management is all about managing your finances such that your income dollars are first going toward your non discretionary expenses and then to your important financial goals. We also need to periodically review our financial plans. Learn more about Financial Management .
Once you have performed the financial health chekup, the next thing is how do I find a good financial advisor. Again, our recommendation to you is to review your overall finances and your personalized PFI before you pick up the phone to call a financial planner. It is very important to work with a financial advisor who fully understands your needs and he/she is someone you can get along with. We have compiled a set of How to Find a Financial Advisor guidelines to help you find the right financial advisor.
Westwood, MA based Omyen Corp. has developed a unique set of highly intuitive and collaborative financial planning software packages for consumers and financial advisors. The PFI is consumer facing financial planning software with a highly intuitive financial education interface. Financial advisors use the PFI for educating the prospective clients. Omyen has also developed an industry leading Wealth PlannerTM for financial advisors. The Wealth PlannerTM is a comprehensive financial planning software that offers both goals based and advanced cash flow based planning . Learn more about Omyen technologies.