lev-os Creating Financial Plans
Structures comprehensive financial plans with cash flow projection, goal analysis, and strategy integration for wealth management, private banking, and financial planning professionals.
When To Use
- Building a new comprehensive financial plan for an individual or household
- Projecting retirement income needs and evaluating savings adequacy
- Consolidating investment, insurance, tax, and estate strategies into a single document
- Updating an existing plan after a major life event (marriage, inheritance, business sale, disability)
- Preparing a plan presentation for a client review meeting or prospect proposal
Inputs To Gather
- Client profile: Age, marital/family status, dependents, employment, health considerations, risk tolerance questionnaire results
- Balance sheet: All assets (liquid, retirement, real estate, business interests, deferred comp) and liabilities (mortgage, student loans, lines of credit, contingent liabilities)
- Income & expenses: Gross and net income streams (salary, bonus, rental, dividends, Social Security estimates), current monthly/annual spending breakdown, and anticipated future changes
- Existing coverage: Insurance policies (life, disability, LTC, umbrella), estate documents (wills, trusts, POAs), and current beneficiary designations
- Goals: Prioritized list with target dates and estimated costs (retirement age/lifestyle, education funding, charitable giving, second home, business succession)
- Tax documents: Recent tax returns (2-3 years), K-1s, stock option/RSU vesting schedules, and any pending tax events
- Assumptions: Inflation rate, portfolio return assumptions, life expectancy, Social Security claiming age [VERIFY against current SSA tables and firm's capital market assumptions]
Workflow
Organize the data room — Confirm all inputs are received and consistent. Reconcile balance sheet totals against account statements. Flag any missing documents with a [VERIFY] note rather than guessing values.
Establish the baseline projection — Build a multi-year cash flow model from current age through assumed mortality (or age 95+). Include:
- Employment income trajectory (raises, bonus variability, planned retirement date)
- Social Security optimization scenarios (claim at 62/FRA/70) [VERIFY current FRA for client's birth year]
- Required minimum distributions from qualified accounts [VERIFY against current IRS life-expectancy tables]
- Tax liability estimates by year (federal + state) incorporating capital gains, ordinary income, and deduction phaseouts
Run goal-funding analysis — For each prioritized goal, determine the present-value cost and map funding sources:
- Retirement: Monte Carlo or deterministic success rate at target spending level
- Education: 529/UTMA projections vs. estimated tuition inflation [VERIFY in-state vs. private cost assumptions]
- Major purchases: Lump-sum timing and liquidity impact
- Legacy/charitable: Identify optimal vehicles (DAF, CRT, ILIT, direct bequest)
Develop strategy recommendations — Integrate across planning pillars:
- Investment: Asset allocation aligned with risk profile, time horizon, and tax location (taxable vs. tax-deferred vs. Roth)
- Tax: Roth conversion ladders, gain/loss harvesting schedule, charitable bunching, qualified business income deduction analysis [VERIFY state-specific tax rules]
- Insurance: Gap analysis for life, disability, LTC, and umbrella coverage against survivor-needs and self-insured retention thresholds
- Estate: Alignment of titling, beneficiary designations, and trust structures with plan goals; federal estate/gift tax exposure [VERIFY current exemption amounts and sunset provisions]
Stress-test the plan — Model downside scenarios:
- Early death or disability of primary earner
- Sequence-of-returns risk in first five retirement years
- Long-term care event (3-5 year facility stay)
- Significant market drawdown (-30% to -40%) in the first year of retirement
Compile the plan document — Assemble sections in presentation-ready format with executive summary, detailed analysis, action-item checklist, and appendix of assumptions.
Output
The financial plan document should include:
- Executive summary: One-page snapshot of net worth, projected retirement readiness (success rate or surplus/shortfall), and top three action items
- Net worth statement: Current balance sheet with asset categorization
- Cash flow projections: Year-by-year table through end of plan horizon with income, expenses, savings, and portfolio balance
- Goal-funding analysis: Each goal with funding status (on track / at risk / underfunded), recommended adjustments
- Strategy recommendations: Prioritized action items across investment, tax, insurance, and estate pillars with responsible party and target completion date
- Scenario analysis: Summary table showing plan success rate under base, optimistic, and adverse scenarios
- Assumptions appendix: All rates, inflation factors, return assumptions, and regulatory parameters used
- Disclosures: Firm-required compliance language, limitation of projections disclaimer, and next-review-date commitment
Quality Checks
- All balance sheet items tie to source statements — no unexplained residuals
- Cash flow model balances each year (inflows minus outflows equals change in portfolio)
- Tax estimates are internally consistent with income and deduction inputs
- Monte Carlo success rate or deterministic surplus is clearly stated with the underlying assumptions
- Every recommendation includes a rationale linked to a specific client goal
- [VERIFY] markers remain on any jurisdiction-dependent figure (state tax rates, exemption amounts, benefit thresholds) that has not been confirmed against current law
- Plan complies with firm's compliance review requirements and includes all mandated disclosures [VERIFY firm-specific disclosure language]
- Action items have owners and deadlines — no orphaned recommendations