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Is Your Financial Life In Order?

By John McCord, Cardinal Point Wealth Management

Life has many variables and involves constant change. The beginning of 2012 offers us a fantastic opportunity to commit to an organized approach for the New Year. One important area of organization that deserves sufficient attention pertains to financial planning. This is especially true in light of uncertainty regarding the current economic climate. Due to this reality, many individuals and families are reassessing their financial state of affairs. Comprehensive financial planning involves a review of investment, taxation, insurance, retirement and estate needs. It is of critical importance to properly coordinate the preceding disciplines with one another. The sophistication of planning is enhanced when cross-border complexities are present.

A recommended starting point for this process is to craft a financial plan with a qualified advisor. An advisor should belong to an organization that has sufficient financial planning experience and credentials. The Certified Financial Planner™ or CFP® from the Certified Financial Planner Board of Standards is one such credible designation. An important topic for any planning analysis originates from the preceding years after-tax cash flows. When properly reviewed, income and spending patters can be assessed by family members and outside financial advisors. Pay stubs and health care expenses are examples of data points that should be discussed. A well-informed financial advisor can position portfolios to supplement the cash flow requirements of their clientele.

An advisor should review goals, values and time frames prior to offering any advice. Importantly, a financial plan can help quantify and qualify one's financial position and offer projections well into the future. Please note that predictions regarding the future are not definitive and cannot be relied upon. However, future projections can be effective in creating dialogue regarding "what if" scenarios. For example, return assumptions that illustrate a 2% portfolio return verses a 10% return will meaningfully impact one's retirement. Of course, financial plans should be updated as significant events occur. Examples are the birth of a child, the sale of a business and modification to the tax code. A few topics found in financial plans are liability analysis, risk management, education funding, generational transfer as well as charitable planning.

Account consolidation is another area that should be reviewed. It is not uncommon for individuals to have duplication within their retirement accounts. For example, one might have three 401Ks with three separate financial institutions. In many cases, it is prudent to "rollover" their three accounts into a single IRA account at their preferred financial institution. One of the advantages of utilizing this strategy is that assets can be managed as one unit. This setup offers additional efficiency and transparency when structured properly.

There is no "one size fits all" cross-border financial planning strategy. Therefore, it is important to partner with a qualified team of tax, legal and investment professionals who specialize in Canadian and United States cross-border transitioning and asset management. Please contact Cardinal Point Wealth Management at http://www.cardinalpointwealth.com/US/contactus.html to review your unique situation.