From Dream to Reality: The Importance of Setting Your Financial Goals and Priorities

What does financial independence mean to you? It’s a question we ask successful  executives, professionals, and business owners who are seeking retirement planning services.  

Success doesn’t happen by accident. It results from well-thought-out goals and a  realistic plan for pursuing those goals. Whether you are a W2 employee, a business  owner, or a 1099 independent contractor; setting clear, realistic financial goals and  priorities should be at the top of your list of financial to-dos. This is particularly important  close to retirement (five years or less). 

In an era when persistent inflation and chronic market volatility are genuine concerns— the need for effective planning and disciplined execution has never been greater. Use a  McLean, VA, CERTIFIED FINANCIAL PLANNER™  Professional who can assist you with aligning your finances with your life goals and the legacy you want to leave behind. 


Defining Your Financial Goals  

Setting financial goals is like plotting a cross-country trip by car. You know where you  want to go, but what is the best way to get there? Planning is like the cross-country  compass that guides your financial decisions and actions. You get to plan your future by  plotting the best course for you. 

We all know our ideal lifestyle, but what constitutes the right plan for you? We already  know that all 60-year-olds are not the same. There can be major differences. Such as,  determining a sustainable level of spending that is personal to you and aligns with your  long-term financial goals. With this understanding, financial freedom might be more  attainable than you thought. 

Beyond financial freedom, there are other priorities to consider.  

  • Do you aspire to own a second home, perhaps in a warm winter climate?
  • How will you provide for your children’s or grandchildren’s education? 
  • Do you want to travel the world with your spouse when fully retired?  

These priorities should play a significant role in shaping your immediate financial future  and plan for retirement. As Benjamin Franklin said, “Failing to plan is planning to fail.” 


The Significance of Prioritized Goals  

Once you have defined your financial goals, the next step is prioritizing them. Think of  this exercise as putting together a complex puzzle. Each piece represents a financial  element – savings, investments, insurance, budgeted expenses, and more.  

It’s important to consider that retirement can last 20, 30, or more years, and expenses  near the end of life can be mind-boggling. 

Another consideration can be the timing of your retirement. The decision between early  retirement and maximizing retirement income hinges on your health, interests, and what  is important. Early retirement may sound like a desirable option, but working a few  additional years allows you to continue building your nest egg to have a larger cushion  when you finally retire. 


An Honest Assessment of Your Current Financial Situation 

The next step is defining where you currently stand financially and what you will need to  retire. This can include: 

  • Examining your current and future income sources, including salary, personal  accounts, 401k, IRAs, Social Security, and other income streams. Compare this  to your monthly expenses, including utilities, mortgage or rent, insurance, transportation, and other month-to-month living expenses. Don’t forget to factor in  the impact of inflation over longer periods. 
  • Carefully scrutinize your investment holdings. Consider your asset allocation, risk  exposure, and current holdings to ensure they align with your goals and  tolerance for risk during your retirement years.  
  • Debt Analysis: Examine your outstanding debts, including credit card balances,  loans, and mortgages. Determine the interest rates and terms associated with  each type of debt and develop a plan for paying them off.  
  • Emergency Fund Evaluation: Ensure an adequate emergency fund, typically  covering six to twelve months of living expenses. This provides a safety net in  case of any unexpected setbacks (illness, job loss, etc.). 
  • In many cases, the easiest way to improve your performance is to reduce the  taxes you pay. This means you should always be looking for ways to be more  tax-efficient. 
  • Insurance Coverage: Evaluate your insurance policies, including life, health,  disability, and long-term care, to make sure you have adequate coverage for all  of the unexpected risks in life. 
  • Retirement Accounts: For the remainder of your working years, are you taking full  advantage of contributions to tax-advantaged accounts (401k, IRA), including  any opportunity for catch-up contributions?  


Crafting Your Financial Plan 

Now that you have identified and prioritized your retirement goals and assessed your  current financial situation, it’s time to craft a retirement plan. Think of your plan as a  roadmap for achieving your financial goals during retirement. Perhaps there are some  compromises between your dreams and the financial realities that impact you.  

A comprehensive retirement plan will be based on a lifestyle that ensures you do not  run out of money late in life. The plan should include items such as 

  • Create a detailed budget describing your income, cost of living, and savings  goals. This will give you a clear picture of how much you can spend during your  early retirement years. 
  • A well-thought-out investment strategy can help your assets increase in value.  Whether you choose stocks, bonds, real estate, or a combination, it should align  with your risk tolerance and expected time horizon. 
  • If you haven’t already, consider creating or updating your estate plan, including  wills, trusts, and powers of attorney, to ensure your assets are protected and  distributed according to your wishes. 
  • If giving back to the community (church, hospital, university) is important, there  are many ways to benefit the causes you care about and provide additional tax  benefits for you. 
  • A financial plan isn’t a static solution; it should evolve with your life’s experiences  and be updated regularly. End-of-year reviews and updates are a very common  practice.  


Get to Know Brown|Miller Wealth Management  

Retirement isn’t a destination; it’s part of your life’s journey that requires not just any  plan but YOUR personalized plan. That’s where the team at Brown|Miller can help you  develop a plan that will last for decades.  

We don’t believe in one-size-fits-all financial plans. Our team of McLean, VA, CERTIFIED FINANCIAL PLANNER™ Professionals crafts a retirement strategy tailored  just for you that pursues your financial goals and leaves the legacy you wish to create  for your loved ones. 

We get it; life does not come with a predictable script. It is more like a ride on a roller  coaster. Our strategies are designed to meet the ups and downs of an unpredictable ride. So when life throws you curveballs or the securities markets experience volatility,  your plan can shift along with them.  

Our goal for you? Produce a dynamic retirement strategy that stays on point as life  throws you curveballs during your golden years. 

Trust is at the core of what we do. As a Brown|Miller client you are partnering with an  experienced fiduciary advisor, only working in your best interest. We’re here to guide  you through every phase of your working life and into a retirement filled with the  possibilities you have worked so hard to achieve. 

Are you ready to build a retirement plan that reflects your vision, goals, and values?  Let’s make it happen together.


eBook Offer: 10 Steps to Sustainable Retirement Income


Disclaimer: This article is intended for informational purposes only, and not to be a client-specific  suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to  buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select  an asset class or investment product based on performance alone. Consider all relevant information,  including your existing portfolio, investment objectives, risk tolerance, liquidity needs, and investment time  horizon. This report is for general informational purposes only and is not intended to predict or guarantee  the future performance of any individual security, market sector, or the markets generally. The information provided in this article represents the opinions of Brown Miller Wealth Management  (“BMWM”) and is expressed as of the date hereof and is subject to change. BMWM assumes no  obligation to update or otherwise revise our opinions or this article. The observations and views  expressed herein may be changed by BMWM at any time without notice. The information may be based  on third-party information, which is deemed reliable, but its accuracy and completeness cannot be  guaranteed. 

BMWM provides links for your convenience to websites produced by other providers or industry related  material. Accessing websites through links directs you away from our website. BMWM is not responsible  for errors or omissions in the material on third-party websites and does not necessarily approve of or  endorse the information provided. Users who gain access to third party websites may be subject to the  copyright and other restrictions on use imposed by those providers and assume responsibility and risk  from the use of those websites.

Search by Topic

Author: Christopher W. Brown, CFP®, CIMA®

Christopher W. Brown is the Founder and Managing Principal at Brown | Miller Wealth Management.