Morningstar research shows goals-based financial planning improved net numbers. Clarifying your own priorities and values can be challenging - but potentially worth it! Morningstar's research also suggests that there sometimes might be a gap between the goals investors initially describe and the goals that are truly relevant and important to them after more discussion and involvement in the financial planning process.
To increase understanding and clarity of possible goals, Morningstar developed a Master List.
Before you review the Master List, suggest you jot down in priority order your 3 top financial goals. If you are retiring or have other financial goals as a couple with one "bucket" of resources (or all "shared" buckets.) suggest each of you do this exercise separately and then compare.
My "Top 3" Financial Goals in priority order are:
1.____________________________________________________________________________________________________
2.____________________________________________________________________________________________________
3._____________________________________________________________________________________________________
Now, review Morningstar's Master List.
Morningstar Master List of Possible Goals
To be better off than my peers
To pay for personal self-improvement (e.g., go back to school, learn a skill)
To experience the excitement of investing
To start a new business
To buy a house
To help pay for my kids’ college education
To stop working and do something I love
To go on a dream vacation
To relocate in retirement
To care for my aging parents
To give to charity or other causes I care about
To feel secure about my finances in retirement
To feel secure about my finances now
To leave an inheritance to my loved ones
To retire early
To pay for future medical expenses
To not be a financial burden to my family as I grow older
Source: Morningstar.
Now, repeat step 1. Write down your 3 top financial goals
1.____________________________________________________________________________________________________
2.____________________________________________________________________________________________________
3._____________________________________________________________________________________________________
Great job that you got this far! 😁 If you happen to be familiar with the Steps of Financial Planning, Monitor your situation is the last step before "Wash-Rinse-Repeat." After a period of time - suggest no more than one year - also revisit these priorities to see if they have changed.
"Morningstar’s Gamma research demonstrates that making sound financial planning decisions in five areas—asset allocation,
withdrawal strategy, guaranteed income products, tax-efficient allocation, and portfolio optimization— can generate 29% more income on average for a retiree." Source: Morningstar: The Value of Advice (attached)