A modern form of independence: Making a plan for your long-term finances

On the 4th of July in 1776, a group of brave individuals made a defining choice: to break free from an old system and build something better.

They didn’t have a guarantee of success — only a vision of freedom and the determination to fight for it. Today, that same spirit of independence can inspire a different kind of revolution — one where you take control of your financial life and declare financial independence.

Whether it’s paying off debt, building savings or finally getting serious about retirement, declaring your financial independence is about making a bold decision to shape your own future, starting now.

It might seem like a far-off dream, but it’s more attainable than you think. Just like the Founding Fathers, you don’t need to be perfect to begin — only persistent and ready to make a plan. If you’re serious about achieving financial freedom, think of your financial plan as your personal Declaration of Independence.

So, what does your Financial Declaration of Independence look like?

It’s not just a document filled with numbers — it’s a living, breathing road map that aligns your money with your values, goals and dreams for the future.

Financial planning isn’t only about budgeting and cutting expenses. While those are important, a true financial plan goes much deeper. It looks at your entire financial picture — from income and savings to insurance, taxes, retirement and legacy planning. And it’s never too early (or too late) to start.

Let’s explore a few key areas that should be included in a comprehensive financial plan:

Social Security optimization

Deciding when to take Social Security benefits is one of the most important retirement decisions you’ll make.

Should you claim early or delay to receive a higher benefit? What’s the best way to coordinate benefits with your spouse? How will Social Security affect your tax situation? These questions are critical and the answers vary based on your unique circumstances.

A Certified Financial Planner can help you weigh the pros and cons and determine an optimal strategy that fits your goals.

Health care and Medicare planning

Health care costs in retirement are often underestimated.

According to the 2024 Fidelity Retiree Health Care Cost Estimate, a 65-year-old retiring today may need approximately $165,000 in after-tax savings just to cover medical expenses. This figure doesn’t include potential long-term care costs, which can be even more significant.

With health care expenses continuing to outpace inflation, including this component in your plan is essential to avoid surprises later in life.

Tax-efficient withdrawal strategies

I often say, “Saving for retirement is easy. Spending in retirement is the hard part.” That’s especially true when taxes are involved.

Many people have the bulk of their retirement savings in tax-deferred accounts like IRAs or 401(k)s. How and when you withdraw those funds can have a major impact on how much you keep.

Exploring strategies like Roth conversions, Qualified Charitable Distributions (QCDs) and tax bracket management can make a meaningful difference.

Legacy and estate planning

Financial independence isn’t just about your lifetime, it’s also about what you leave behind. A good financial plan includes legacy planning, which ensures that your assets are transferred according to your wishes.

This could involve creating a will, establishing trusts, designating beneficiaries or planning charitable contributions. Without a solid plan, your loved ones could face unnecessary taxes, legal fees or conflict.

Building a comprehensive financial plan might seem overwhelming at first, but remember, it’s a marathon, not a sprint. Each small step you take — whether it’s creating a budget, paying off a credit card or setting up an investment account — brings you closer to financial independence.

And just like the American colonists who weren’t afraid to fight for their freedom, you don’t need to wait for the perfect moment to start. Find a CFP Professional you feel comfortable with and contact them to discuss your Financial Declaration of Independence.

Justin Kittle is a Chartered Financial Analyst and CERTIFIED FINANCIAL PLANNER. He is a member of the Financial Planning Association of Greater Kansas City and the CFA Society of Kansas City. He serves as Portfolio Manager and Advisor for IMA Advisory Services, a federally registered investment adviser under the Investment Advisers Act of 1940.

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