What Is Comprehensive Financial Planning?

Comprehensive financial planning looks at more than your investments. It brings together your retirement, taxes, investments, cash flow, insurance, estate planning, and other goals so you can understand how one decision may affect another.



You may benefit from it when your finances have become more complex, when you're balancing several goals at once, or when you're making decisions that affect more than one part of your financial life.

You can be doing a lot of things right financially and still wonder whether all of it is actually working together. Maybe you're contributing to your 401k, investing outside of retirement, keeping some cash in savings, and paying down your mortgage. You might also have company stock, a couple of old retirement accounts, a business, college costs coming, or a retirement that suddenly feels closer than it used to.

At some point the questions start to overlap. Do you put more toward retirement or keep more cash available? Sell the company stock or hold it? Make a tax move this year, or wait? Each answer seems reasonable in isolation, and then you realize the decisions are all connected.



That's where comprehensive financial planning becomes useful. Instead of choosing what looks best for one account or one goal, you get to see what else a decision touches before you make it.

What is Comprehensive Financial Planning?

Comprehensive financial planning is a way of looking at the different parts of your financial life together rather than focusing only on your investments or one particular goal.

Depending on your situation, a financial plan may include:

• Cash flow and savings
• Retirement planning
• Investment management
• Tax planning
• Insurance and risk management
• Estate planning
• Employer benefits
• Equity compensation
• Education planning
• Major purchases and other financial goals

Not everyone needs help with every one of these areas at the same time.  Someone in her 40s may be trying to decide how much to put toward retirement while paying for children, traveling, and considering a home renovation. While someone approaching retirement may be much more focused on Social Security, taxes, healthcare, and how to turn investments into income.

The pieces change depending on what's happening in your life.



What makes the planning comprehensive is that we pay attention to how those pieces affect each other.

What Does That Look Like in Real Life?

Say you receive a large amount of company stock and you're deciding whether to sell it.  On the surface, that's an investment question: should I sell or hold it?

But selling may also affect your taxes. Holding may leave too much of your wealth tied to one company. The proceeds could help fund another goal. And if you're already receiving more company stock each year, that matters too.  One decision has quickly turned into several.

Retirement is another good example.

You may start with: can I retire at 60? 

To answer that, we need to know what you expect to spend, where your income will come from, when you may claim Social Security, what healthcare will cost before Medicare, how your withdrawals will be taxed, how your investments are positioned, and how long your money may need to last.

The answer doesn't live in your 401k balance.

That's what comprehensive planning is meant to help with: seeing the other decisions connected to the question you're trying to answer.

What Is the Difference Between Investment Management and Comprehensive Financial Planning?

Investment management focuses primarily on your portfolio: how your money is invested, how much risk you're taking, whether your investments are diversified, and whether your portfolio still fits what you're trying to accomplish.  Comprehensive financial planning includes your investments, but it goes further.

You can have a well-managed investment portfolio and still have questions such as:

• Am I saving enough for retirement?
• Should I be using a Traditional or Roth 401k?
• How much cash should I keep?
• What should I do with my RSUs?
• When should I take Social Security?
• Can I afford to help my children financially?
• Should I pay off my mortgage before retirement?
• Are there tax decisions I should be making this year?
• Does my estate plan still reflect what I want?

Your investments are one part of answering those questions. They're rarely the whole answer.

For me, investment management works best when the investments have a job to do within the financial plan.

How Do Taxes Fit Into Comprehensive Financial Planning?

Taxes are a good example of why financial decisions need some coordination.

You don't necessarily need a complicated tax strategy. But as your income and wealth grow, taxes tend to show up in more of your decisions.

Selling investments can create capital gains. RSUs can increase taxable income or exercising options can create surprising tax implications without a strategic strategy. Choosing between Traditional and Roth retirement contributions affects when you pay tax. Retirement withdrawals can affect your tax bill and sometimes other costs tied to income.

So when I'm helping a client think through a financial decision, one of the questions we're asking is simply: what does this do to your taxes?

Sometimes saving taxes today makes sense. Other times, paying more tax now may give you more flexibility later.  The tax answer shouldn't automatically make the decision for you, but you should understand it before you decide.

How Does Retirement Fit Into a Comprehensive Financial Plan?

Retirement planning starts long before you retire.

Earlier in your career, we may be deciding how much to save, which accounts to use, and how retirement fits alongside the other things you want to do with your money. 

As retirement gets closer, the questions change. Now we may be talking about:

• When can I afford to retire?
• How much can I spend in retirement without running out of money?
• When should I start taking Social Security?
• How much should I plan to spend on healthcare in retirement?
• How will my taxes change when I retire?
• Which accounts should I withdraw from first in retirement?
• How should my investments change as I get closer to retirement?
• What happens to my retirement plan if the market drops after I retire?
• If I'm married, what happens financially if one of us lives much longer than the other?

The focus moves from accumulating money to figuring out how that money will support your life.

If you're already wondering whether you've saved enough, I go much deeper into this in How Long Will My Money Last in Retirement?

When Is It Helpful to Have a Financial Planner Looking at the Whole Picture?

You don't need to reach a certain age or net worth before financial planning becomes useful.  A better indicator is often the number of decisions you're trying to coordinate.

You may benefit from comprehensive financial planning if:

• You're balancing several financial goals at the same time.
• Your income has increased and you're not sure what to do with the additional money.
• You have accounts spread across several employers or institutions.
• You're receiving RSUs, stock options, or other equity compensation.
• Taxes are becoming part of more of your financial decisions.
• Retirement is getting close enough that you want to know whether you're on track.
• You own a business or have multiple sources of income.
• You and your spouse have different incomes, benefits, or retirement timelines.
• You're going through a divorce, inheritance, career change, business sale, or another major life change.
• You're doing well financially but aren't sure what deserves your attention next.

That last one matters.

Many people who work with a financial planner aren't in financial trouble. They've saved. They've invested. They've made thoughtful decisions for years. Eventually, though, there can be enough moving pieces that having another person help you think through them becomes valuable.

If you're wondering whether you've reached that point, I've written more about it in How Do You Know It's Time to Hire a Financial Planner?

What Does Comprehensive Financial Planning Look Like at Nexa Wealth Planning?

When I first meet with someone, I want to understand what brought them in and what they’re trying to figure out. Maybe retirement is getting closer and they want to know if they’re on track. Maybe they’re earning more but aren’t sure where the extra money should go. Or they may have accumulated several accounts over the years and want to know whether they’re using them as effectively as they could be.

From there, we look at what they already have in place and where there may be opportunities to make changes. That could mean adjusting how much they’re saving, looking at how their accounts are invested, planning ahead for taxes, or deciding how to balance retirement with other things they want to spend money on.

And I don’t assume the answer is always to save more.

Sometimes a client can afford to travel more, help their children, renovate the house, or retire earlier than they thought. Other times, the numbers show us that spending more in one area means making an adjustment somewhere else.

This is where I think financial planning becomes especially useful. We can put numbers around the choices so you can see what each one means before you make it.  If you’d like to see what’s included when we work together, you can learn more about my comprehensive financial planning services here.

Frequently Asked Questions:

Is comprehensive financial planning the same as investment management? No. Investment management focuses on how your money is invested. Comprehensive financial planning looks beyond your portfolio to things like retirement, taxes, cash flow, insurance, estate planning, and the other goals you're saving for.  Your investments are still an important part of the plan, but they're not the only part.

Is comprehensive financial planning only for wealthy people? No. You don't need to reach a certain net worth before financial planning can be useful. It may make sense when you have several financial decisions to manage at the same time, like multiple accounts, equity compensation, higher income and taxes, competing goals, an approaching retirement, or a major change in your life.

The question isn't only how much money you have. It's whether you're at a point where you'd benefit from help deciding what to do with it.

Can I get comprehensive planning as a one-time project, or only ongoing? Yes. Some people want help answering a specific set of questions or putting a financial plan together, while others want an ongoing relationship with an advisor.  A one-time project may work well when you have a fairly defined set of questions. Ongoing planning can make more sense when you have decisions coming up throughout the year or your financial situation changes regularly.

Does a financial plan change over time? Yes, and it should. A financial plan is based on your life and finances today, and neither will stay exactly the same. Your income may change. You may change jobs, buy a home, have children, receive an inheritance, sell a business, or decide to retire earlier than you expected. Markets and tax laws change too. You don't need to predict all of those things in advance. As your life changes, your financial plan should be revisited and adjusted with it.

If you’d like to talk through what’s going on in your financial life and see whether comprehensive planning could be helpful, schedule an introductory conversation. We can start with what’s happening in your life and what you’d like help figuring out.