Financial Planning

**For illustration purposes only**

As was discussed during the first meeting, a “fact-finding” meeting was arranged with Steve Ambeault and Mitchel MacDonald so that the Smith’s circumstances and goals could be understood and a financial plan prepared.

During this meeting Steve enquired about the Smith’s desired retirement age (55), lifestyle spending goals, estate goals, their dependents (twins 10yrs old), past CPP contributions, current investments, pensions plans, real estate holdings, and debt levels.

In addition to gathering information, we discussed which financial planning scenarios the Smith’s would like to consider.

Given that the Smiths were set on retiring at age 55, it was decided that the first scenario would use some conservative economic and investment return assumptions to see if the Smiths could meet their retirement and spending goals even if the planets didn’t align.  Assuming they were able to meet their goals in the first scenario with some room to spare, the second scenario would consider what their maximum lifestyle spending could be if they were able to draw down their investments to exactly zero at life expectancy.  Finally, the third scenario would consider how much their lifestyle spending could increase during retirement if the economic and investment return assumptions were a little more favourable.

Steve and Mitchel took the information from this meeting and put together a 32-page financial plan that provided the Smiths with Grades for each of their goals (A for meeting a goal with room to spare, and F for falling fall short of a goals, with B, C, D for something in between).

Steve and Mitchel followed up with the Smiths to review the financial plan together so that the Smiths could see and understand all the information that the plan provided.

Satisfied with the results, Steve and Mitchel would be providing annual report cards to evaluate how well the Smiths are able to stick to their plan.  These report cards would be reviewed when the Smiths come in to discuss their investment performance with Mike.