Essential components of a financial plan

Presented By Bob Brown

In Las Vegas, the bright lights and poker tables remind us that chance can be thrilling—but when it comes to your financial future, relying on luck is a gamble you can’t afford. That’s where a solid financial plan comes in. A comprehensive plan isn’t just about investments; it weaves together retirement goals, risk management, tax strategies, estate considerations, and more. Think of it as your playbook for navigating uncertainty with confidence– so no matter how the cards fall, you’re prepared to stay on track.

According to Schwab’s 2024 Modern Wealth Survey, those who put pen to paper with their financial plans feel more in control of their finances and more confident in reaching their goals.

But having a written financial plan is just a start. To be truly effective, your plan should be complete, realistic, and actionable.

So, how do you know if your plan fits the bill? By ensuring it has these five key components.

Clearly defined goals. Think of your goals as a road map to where you want to go—and make them practical and attainable. Here’s a simple two-step approach:

Step 1: Divide your goals into three categories: short term (next one to two years); medium term (next three to 10 years); and long term (more than 10 years).

Step 2: Attach a dollar amount to each. The more specific you can be, the more motivated you’ll be to work toward that goal.

Current financial snapshot. Total up the amount of money you’ve already accumulated for each goal and how it’s being saved or invested. Then run those numbers through an online calculator (like the retirement calculator available on Schwab.com) to determine if you’re on track.

Realistic savings targets. Once you know whether you’re on track, consider how much you’ll need to contribute toward each goal over time. The earlier you start saving, the less you’ll have to set aside each year.

For example, if you start saving in your 20s, aiming for about a 10% savings rate (which includes any match from your employer) can be a good goal. If you wait until your 30s, that number may need to bump up to between 15% and 20%. Wait until your 40s, and you may have to put away 25%–30% each year.

Up-to-date risk profile. Evaluate the amount of risk you can stomach with your investments to help inform how you should allocate your portfolio between stock, bond, and cash investments. This is key to staying the course toward your goals during the inevitable ups and downs in the market.

Your willingness to take on risk should vary depending on your savings goals. For example, if you’re nearing or entering retirement, you might be aiming to grow the value of your investments while satisfying your current income needs. So, you probably don’t want to risk significant losses in your portfolio. A longer-term goal may allow you to be a bit more aggressive in your allocation.

Realistic return expectations. A sound investment plan contains some sort of expectations regarding portfolio returns. These expectations aren’t year-by-year forecasts, but represent long-term averages used in the planning process. An experienced wealth advisor can help you run different scenarios and determine the best assumptions for your situation.

In a city built on risk, the best bet you can make is on a well-crafted financial plan. The Charles Schwab branch in the heart of Centennial Hills and North Las Vegas can help. Stop by our office and let’s build a plan that gives you clarity, confidence, and control—so you can enjoy everything Vegas has to offer without gambling on your financial future.

Charles Schwab Independent Branch: 7910 W. Tropical Parkway #120, Las Vegas Nevada 89144. 702-854-6140

Bob Brown is a Independent Branch Leader & Financial Consultant at Charles Schwab with over 30 years of experience helping clients achieve their financial goals. Some content provided here has been compiled from previously published articles authored by various parties at Schwab. Charles Schwab & Co., Inc., Member SIPC.

This information is for educational purposes only and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.

Investing involves risk including the potential loss of principal.

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