A financial plan is a document that summarizes your current financial position, makes some assumptions regarding future financial events, and projects your financial position at some date in the future. Many financial plans are goals based, meaning you set out your goals and the calculators within the planning software determine your ability to achieve those goals.
A comprehensive financial plan should consider one or more goals taking into account your priorities and tolerance for risk. It should then set out investment, wealth preservation and protection strategies that can help you meet your goals. Estate planning strategies are also often incorporated into the plan.
Once a plan has been developed, it should be reviewed regularly and updated to take into account realized result and any changes in your personal circumstances.
