Components of Financial Planning
|Component||How does it help you||It tells you about|
|1||Fundamental Planning||Analyses your current financial situation and plans for contingency||Your risk profile; Net worth; Asset allocation; Financial ratios; Efficiency of investments and effect of inflation on finances; Contingency fund required|
|2||Insurance Planning||Analyses various risks and finds your life and general insurance needs||Insurance covers required for life, health, personal accident, critical illness, liability, home, vehicle, etc.|
|3||Investment Planning||Helps build right investment portfolio through proper asset allocation||Required asset allocation as per your risk profile; Current assets-goal mapping; Fresh investments recommendations; Risk-adjusted returns from your investment portfolio|
|4||Tax Planning||Plans tax efficient income, expenses and investments for higher savings and better returns||Various kinds of taxes and their effect on investment returns; Tax benefits as per law & tax saving options as per your risk profile and time horizon for goals|
|5||Retirement Planning||Helps in building a corpus to fund expenses in your golden years of retirement||Corpus required on retirement to fund expenses maintaining lifestyle and adjusting for inflation & life expectancy; Current assets and fresh investments required to build that corpus|
|6||Estate Planning||Ensures orderly transfer of wealth to your next generation as per your wish||Strategies like nominations, wills and trusts; How and when to go for these; Minimizing taxes on your estate|
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