by John Wade,
Certified Financial Planner Practitioner
Contributing Writer

No matter who you are or where you are financially, you should have a good financial plan. A financial plan is more than just a savings or investment strategy; it takes into account all the "what ifs" of life: what if I retire, what if my kids don't get scholarships, what if I get in an accident, what if I die, and so on.

There are a lot of people out there dispensing financial advice, from insurance agents to stockbrokers. The first thing you should look for is objectivity. A real financial planning professional will be objective and not interested in selling you specific financial products or services. If your financial planner is in the business of selling a particular kind of financial product, how thorough and objective will he be? You can bet his plan will include the products he sells. You should also look for a high degree of professionalism, experience and proof of special training or certification.

Just as important as objectivity is a sense of reality. A good financial plan shouldn't be based on unreasonable projections or ideal rates of return. Your plan needs to be based on realistic expectations and attainable goals. And it should be thorough.

A thorough financial plan covers these seven important elements:

• Insurance
• Cash reserves
• Education planning
• Investment planning
• Tax planning
• Retirement planning
• Estate planning

When you have a good, reasonable answer for the 'What ifs" in each of these categories, then you know your plan is sound and complete. Remember, though, a financial plan should never be set in stone. It should be reviewed annually and updated regularly to take into account changes in your life.

A financial planner is a lot like a personal trainer. Sure, you know that you need to exercise and eat right, but do you do it? And do you know which exercises you should do? A personal trainer is there to create a workable plan, to answer questions, set goals and help you follow through. A financial planner is no different. He or she is there to help strengthen you financially. Your planner, then, is a motivator, someone who can provide goals, suggest ways to meet those goals, and adjust your plan to meet new needs down the road. And, as a side benefit, the objective financial advice of a third party can help settle differences of opinion between you and your spouse.

Retirement distribution planning is critical to the success of your retirement. You not only have to know how much you can take out each year, but also, when you have a variety of investments, which money you should touch and which money you should leave alone.

It's important to not let the historic rate of return on equities cloud your judgment. Your retirement should contain a variety of investment and savings vehicles, all earning different rates. You have cash and bonds that earn less per year than your favorite stock.

With that in mind, a safe withdrawal rate from your retirement accounts is 4 to 4.5 percent annually. Any more than that, and you risk running out of money before you run out of years. Your financial planner can help you accurately project your withdrawals, and when the time comes, counsel you on the best way to enjoy that money in retirement.