Goals-Based Financial Planning Guide for Advisors

Last Edited by: LPL Financial

Last Updated: October 16, 2023

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Goals-based financial planning provides natural touchpoints for you and your clients to build a long-term, collaborative partnership.

Investors are reimagining what it means to be financially successful. Instead of using market performance as their yardstick, they’re measuring success by their ability to pursue and achieve meaningful life goals—and they’re looking to advisors like you for guidance. But before you can help your clients create a goals-based financial plan, it’s important to understand the unique characteristics and challenges faced by each generation.

Young Accumulators

  • Age: Born between 1981-1996, known as millennials or Gen Y
  • Life stages: Furthering education, establishing career, starting a family 
  • Financial goals: Reducing debt, building an emergency savings fund, starting retirement savings, home ownership
  • Recommended savings by age:1 Equivalent of annual salary by age 30, three times annual income by age 40
  • Financial stressors:

Goals-based planning for millennials

Millennials are in an exciting stage of life marked by milestones: building a career, getting married, starting a family, and purchasing a home. They may need help with things like:

  • Creating a budget, or adjusting an existing budget to accommodate childcare and other needs of a growing family
  • Understanding the mortgage application process and calculating the necessary down payment amount to avoid private mortgage insurance
  • Learning how to invest in the market
  • Evaluating company benefits and options for retirement savings plans

The possibilities may seem endless, but these growth-mode years won’t last forever. Using goals-based financial planning, you can help millennials pursue their short- and long-term goals while building sound financial practices along the way. 

This approach also highlights the value of working with a financial advisor over do-it-yourself models. From the initial point of prioritizing goals and creating strategies to pursue them, to periodic check-ins to measure progress, goals-based planning provides natural touchpoints for you and your clients to build a long-term, collaborative partnership. 

Experienced Accumulators

  • Age: Born between 1965-1980, known as Gen X or the “sandwich generation”
  • Life stages: Advancing or changing careers, becoming empty nesters, caring for aging loved ones
  • Financial goals: Seeking financial stability, maximizing retirement savings, saving for their children’s college education
  • Recommended savings by age: Six times income by age 50      
  • Financial stressors:
    • Almost half (45%) of working Gen Xers say they feel significantly behind where they should be with their retirement savings6
    • Significant debt and household expenses
    • Unexpected life events, such as divorce, serious illness, or job loss

Goals-based planning for Gen X

Despite hitting their peak earning years, Gen Xers’ income doesn’t seem to stretch far enough. Torn between the competing priorities of raising a family and caring for aging loved ones, it’s no wonder they have more debt than any other generation.7 And after living through two major recessions, a war, and a global pandemic, a recent T. Rowe Price financial planning study revealed that Gen Xers tend to be more conservative and risk-averse than older investors and feel less optimistic about the future.8

They may look to a financial advisor for help with:

  • Reducing debt
  • Estate planning
  • Saving for their children’s college education
  • Catching up their retirement plan contributions

Positioning yourself as a financial coach rather than a wealth advisor can go a long way toward building a lasting rapport with these investors. With so many competing financial priorities, they may feel overwhelmed and unsure where to start. Addressing their pain points with a holistic financial plan can give them a clear focus that breaks their big picture goals into manageable pieces. 

And while their investment horizon may be shorter than millennials’, it’s not too late to gain momentum toward their long-term objectives. Gen Xers aged 50 and older can make additional contributions to their 401(k) and individual retirement accounts (IRAs) above the standard contribution limits. 

Pre-Retirees and Retirees

  • Age: Born between 1946-1964, known as Baby Boomers
  • Life stages: Transitioning away from full-time career, pursuing hobbies and interests, becoming grandparents
  • Financial goals: Reducing debt, saving for retirement, managing finances while living in retirement 
  • Recommended savings by age: 8 times income by 60, 10 times income by 67
  • Financial stressors:
    • Not having enough saved for retirement
    • Consumer debt
    • Health issues and healthcare costs

Goals-based planning for Baby Boomers

Despite logging more years in the work force than any other generation, many Baby Boomers are afraid they don’t have enough money to begin or sustain their retirement. How can this be the case? Consumer debt and rising healthcare costs certainly play a role, but economic volatility seems to be the biggest factor.

Some older investors never fully recovered from significant losses during the Great Recession in 2008, and then suffered another major setback during the financial turbulence of the pandemic era. In fact, Fidelity estimates that the average retirement account lost one-fifth of its value in 2022 alone.9 Without adequate savings, many retirees put their hopes in Social Security. But in early 2023, the average Social Security retirement benefit10 was only $1,782 per month, which falls about $2,500 per month short of the U.S. Bureau of Labor Statistics11 data for spending patterns of adults 65 and older.

Baby boomers may need help:

  • Managing their finances in retirement
  • Paying off debt
  • Creating an inheritance plan
  • Determining when to begin drawing Social Security 

As you talk to your clients about their ideal retirement, ask questions that get to the heart of their “why”. These conversations play a critical role in helping your clients prioritize what’s most important and setting reasonable expectations. And having a clear understanding of their goals will help you craft an effective money management strategy that includes appropriate short-term cash reserves, an intermediate blend of conservative and growth-focused investments, and longer-term investments designed to grow. 

Let LPL Financial Help 

Ready to begin developing goals-based financial plans for your clients? LPL Financial can help. Contact us today to learn more about how to implement and scale financial planning in your business. 

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1 “Here’s How Much Money You Should Have Saved at Every Age”, cnbc.com (August 2023)

2 "Average Cost of College & Tuition", Education Data Initiative (September 2023)

3 "This Was the Average Cost of a Wedding in 2022", theknot.com (February 2023)

4 "This Is How Much Child Care Costs in 2023", care.com (July 2023)

5 "Housing Market Predictions for 2023: When Will Home Prices Be Affordable Again?", Forbes (September 2023)

6 "Survey: 56% of Americans Feel Behind on Saving for Retirement", Bankrate (September 2023)

7 "Liabilities by Generation", Federal Reserve (September 2023)

8 "Prospecting the Next Wave of Wealth: Connect with Your Clients of Tomorrow", T. Rowe Price® (2021)

9 "Fidelity® 2022 Retirement Analysis", Fidelity® (February 2023)

10 "Benefits Paid by Type of Beneficiary", Social Security Administration (February 2023)

11 "Consumer Expenditure Survey", Bureau of Labor Statistics (2021)

12 "How to Manage Your Money After You Retire", Bankrate (August 2023)

13 "5 Retirement Planning Steps to Take", Investopedia (August 2023)



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