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Setting Your Financial Goals

What’s the most effective way?

Defining Your Goals

What are your financial goals? Retiring comfortably, funding your children’s education, buying your dream home, or leaving a family legacy? Simply put, they are the reasons you invest.

To help you reach your goals, the first step is to clearly define them and then set up a plan to help achieve them.

Know Where You’re Headed

Any successful journey needs two things: a clear destination and a defined route. That’s why it’s important to first identity your financial goals and then ask questions that will help you map your path. Assuming you consider being able to retire comfortably as a primary goal, you may need to ask yourself:

  • What are your estimated expenses in retirement (for example, living expenses and health care)?
  • Do you have any liabilities that need to be paid off (or that you want to pay off) before you retire?
  • When do you want to retire? When you qualify to receive full Social Security benefits? Before that? Later than that?
  • If you plan to retire before becoming eligible for Medicare (at age 65), how will you obtain health insurance coverage, and what will it cost?
  • Should you increase your annual retirement savings?
  • What’s more important - retiring early or helping to fund your children’s or grandchildren’s education?
  • Are there particular things you want to plan to enjoy – family weddings, a second home, boat, or a special travel experience?
  • How do you want to spend your time in retirement? Simply relaxing at home? Travelling the world? Volunteering? Starting a second career?

Answering questions like these can be vital to helping you determine the path to achieving your goals.

Put Time on Your Side

Defining your goals as early as possible gives you more time to work toward them. Having more time offers two distinct potential advantages:

  • May allow you to invest more aggressively, which can increase your risk profile, but may yield more rewards. Working with your financial advisor can help you determine what’s right for you.
  • Gives you the opportunity to take advantage of the potential for compound growth.

Ask for Help

Because setting financial goals can be challenging for even experienced investors, we recommend working closely with your financial advisor to assess your needs, define your goals, and prioritize where to start.

Next steps

  • Write down your financial goals.
  • Prioritize your list from the most important to the least important.
  • Work with your financial advisor to finalize your goals and create your plan.