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Financial Planning: Dangers of Doing It Alone

Financial Planning: Dangers of Doing It Alone

May 09, 2018

How you plan to spend your money in the future, how much you want to save, and what financial goals you set might seem like simple decisions. Moreover, these likely seem as though they are personal decisions that you can and should take on yourself. The reality of financial planning is that there are many dangers involved in tackling this task on your own, without the assistance of a qualified and experienced professional. As The Balance notes, a financial planner is a professional who, "helps you organize your finances, projects the results of your savings and investments, and judges how well you are prepared for retirement." If you want to handle financial planning right, consider seeking help rather than doing it alone.


Changes in Legislation that Affect Your Planning

As control of the White House and both houses of Congress change with time, so too can legislation determining how tax laws and other investments will impact your financial plan. Unless you are going to spend your own free time tracking all of these changes and assessing the likely impact those have on your accounts, but a financial planner or advisor spends their time determining how all these changes could affect you.


Changes in Mutual Fund Options

Brokerage firms will regularly change mutual fund options, whether it is the rating and use of one particular type or simply moving client money around between accounts. Whatever the case may be, changes in mutual fund options at a brokerage firm can impact your planning for the future. If you are not paying close attention, you could have your money transferred to a fund that does not advance your financial planning goals.


Changes in Annual Retirement Account Contributions

Currently, individuals can contribute $5,500 to either a Roth IRA or Traditional IRA as an example of private contributions people can make. This is the annual cap, but things can change over time. For instance, simply reaching the age of 55 entitles you to make catch-up payments, raising the maximum contribution to $6,500 annually. If you are not aware of this milestone or following the news when regulations change, you could be missing out on a more successful financial plan.


Looking into the Future

Most people are not capable of looking into the future to see what it has in store for them, what type of retirement they hope to have, or even where they might retire. If you cannot see the future, it is rather challenging to plan for it. A financial planner or advisor can at least advise you on the course of action to take to pursue particular goals.


Setting a Solid Plan

You might be perfectly capable of setting goals and realizing what it is you want to enjoy in the future, but do you know how to build a plan capable of working toward those goals? Financial advisors and planners can help you put together a plan, and advise you on; investments, estate planning, tax liability, and even college education for children.


Taking Advantage of Knowledge

Financial planners have the experience and knowledge required to navigate the ups and downs of investing. Planning for the future is not something everyone can or should do on their own. For example, The Simple Dollar points out those with high net worth, high wages, specific planning needs, and the self-employed should tap the knowledge of financial planners to ensure their future is a financial success.


Manhattan Ridge listens closely to your visions for your financial future, which enables us to design and manage your portfolio, choosing the specific investments that we believe have the greatest potential to address your objectives in light of your risk tolerance.