CPCU 556 Chapter 1: Introduction to Personal Financial Planning

The process by which individuals and families develop and implement a comprehensive plan for achieving their financial goals.

The pattern of changing financial goals people set as they face new life circumstances.

A retirement savings plan by which an individual can use tax-deductible and tax-deferred methods for accumulating funds.

Step 1: Establish and Prioritize Personal Financial Goals
Step 2: Gather Information
Step 3: Analyze the current Situation
Step 4: Identify anfd Evaluate Alternatives
Step 5: Develop a Plan
Step 6: Implement the Plan
Step 7 Monitor and Revise the Plan

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Risk management planning is concerned with identifying, analysing, and treating exposures to loss, primarily in the areas of property, liability, health, and life.

Savings and investment planning helps people determine the appropriate types and amounts of investments reuired to meet their financial goals. There is an enormous variety of financial instruments and investment strategies, and individuals can craft the appropriate strategies to meet their financial goals at any point in their lifetime.

Tax planning focuses on minimizing the total amount of taxes paid to federal, state, and local governments, both now and in the future.

Estate planning is a specialized part aspect of overall financial planning that focuses on the orderly transfer of property during life and death. Tax minimization is an important aspect of estate planningl it can make a considerable difference in the size of an estate being passed to heirs.

Retirement planning focuses on estimating the financial resources needed to meet financial goals during retirement and designing the strategies to accumulate those resources.