Financial planning for incorporated professionals is often two-sided- planning for the practice and personal financial planning. A few things to keep in mind for professionals are:

• Professionals are typically in the highest income tax bracket, therefore incorporating their practice can help manage and defer taxes at a lower corporate tax rate.

• By incorporating- professionals can have access to dividends from their corporation, shareholder loans, corporately held life insurance and since money can be left inside a corporation- this money can be used in years where there are life changes such as pregnancy, buying a home or retirement.

• Professionals should also ensure that they have access to health benefits.

• Debt for a professional is not unusual, given the costs of education and equipment, therefore working with an advisor and accountant can help an incorporated professional find a way to balance their cash flow.

Why do you need a Financial Plan?

• Worry less about money and gain control.

• Organize your finances.

• Prioritize your goals.

• Focus on the big picture.

• Save money to reach your goals.

For an incorporated professional, personal and practice finances are connected. Therefore both sides should be addressed: Personal and your Practice.

What does a Financial Plan for an Incorporated Professional include?

There are 2 main sides your practice’s financial plan should address: Growth and Preservation

Growth:

• Cash Management- Managing Cash & Debt

• Tax Planning- Finding tax efficiencies

• Health Benefits

Preservation: 

• Investment- either back into the business or outside of the business

• Insurance Planning/Risk Management

• Retirement Planning

What does a Personal Financial Plan include?

There are 2 main sides your financial plan should address: Accumulation and Protection

Accumulation:

• Cash Management – Savings and Debt

• Tax Planning

• Investments

Protection:

• Insurance Planning

• Health Insurance

• Estate Planning

What’s the Financial Planning Process?

• Establish and define the financial planner-client relationship.

• Gather information about current financial situation and goals including lifestyle goals.

• Analyze and evaluate current financial status.

• Develop and present strategies and solutions to achieve goals.

• Implement recommendations.

• Monitor and review recommendations. Adjust if necessary.

Next steps…

• Talk to us about helping you get your finances in order so you can achieve your lifestyle and financial goals.

• Feel confident in knowing you have a plan to get to your goals.