You hire a planner, you pay a fee, and what do you get in return? You benefit in two very different kinds of ways: psychological and monetary.

The psychological benefits are yours. You keep them. They include things like increased peace of mind, progress toward reaching your goals, without worry about unfinished business.

What about the monetary benefits? This is how most planners must justify their existence, their employment. For now, don’t even consider the long-term strategic benefits of having a plan. For now, look at just the first couple of years. The typical client will usually see a cash-an-cash measurable, identifiable return of anywhere from eight to 30 times the fee. In other words, if your fee is $1,000, you will see anywhere from $8,000 to $30,000 in identifiable returns within the first 24 months. What kinds of returns? Income tax savings. Improved returns on investments. Savings on legal fees. Savings on insurance premiums. Increased cash flow.

Of course it would be most unprofessional if your planner tried to guarantee that return. Although, a good planner can promise that, in spite of of what you see during the first few years, you will absolutely benefit in the long term from a solid, well-thought out financial plan.

And a good planner should be busy enough with an already active clientele that he will guarantee that, if at the conclusion of the exhaustive data-gathering interview, he doesn’t feel he can accomplish something for you that will be very meaningful, then he will bow out of the engagement.

Planners are usually in this career because they love what they do, not because they like to do busy work. You don’t want to hire a planner to do busy work, nor does he want to do it. He is well aware that his clientele only gets stronger when he has satisfied clients that would be happy to refer him to their family and friends. To accomplish that, he has to have a long-term client relationship, where they get financially ahead.

Only then, do both the client and planner thrive. Only then, does your planner stay employed by you and be referred to your neighbors and colleagues.

This is the way it should be, because like all laws governing money happiness, everyone benefits from following these guidelines.

You hire a planner, you pay a fee, and what do you get in return? You benefit in two very different kinds of ways: psychological and monetary.

You get to keep the psychological benefits, which include not worrying about unfinished business, advancement toward your goals, and increased peace of mind.

Monetary benefits, of course, are what keep the planners subsistence in the business. At the moment, don’t worry about the long-term strategic benefits that come along with having a plan, but look at the first couple of years. The typical client will more often than not see a particular return of anywhere from eight to 30 times the fee. For example, if your fee is $1,000, you will see a return of anywhere from $8,000 to $30,000 within the first two years. Some of the types of returns you can expect to see are income tax savings, improved returns on investments, savings on legal fees and insurance premiums, and increased cash flow.

Of course it would be most unprofessional if your planner tried to guarantee that return. Although, a good planner can promise that, in spite of of what you see during the first few years, you will absolutely benefit in the long term from a solid, well-thought out financial plan.

Furthermore, a good planner ought to be busy enough with an already active clientele. That way he can make sure that, if at the end of the comprehensive data-gathering interview, he doesn’t feel he can achieve something for you that will be very meaningful, then he will bow out of the engagement.

Planners are usually in this career because they love what they do, not because they like to do busy work. You don’t want to hire a planner to do busy work, nor does he want to do it. He is well aware that his clientele only gets stronger when he has satisfied clients that would be happy to refer him to their family and friends. To accomplish that, he has to have a long-term client relationship, where they get financially ahead.

Only then, do both the client and planner thrive. Only then, does your planner stay employed by you and be referred to your neighbors and colleagues.

And that is as it should be, because like all laws governing money happiness, everyone benefits from complying.

Workers, retirees and other Social Security recipients will receive new tax relief. The ARRA created a new tax credit called the Making Work Pay credit. It provides anywhere from $400 to $800 for filers, without a phase-out for higher income households. Unlike 2008’s recovery rebate check, this credit will be distributed through a reduction in income tax withholdings.

In addition to the credit for workers, it also pays out a one-time payment of $250 to fixed-incomers. Disabled vets and Social Security recipients will generally qualify. In a similar way, it will create a one-time refundable tax credit to specific government retirees that may normally not qualify for Social Security benefits. This $250 reduces any applicable Making Work Pay credit.

Most of the tax breaks in this act are expansions of existing breaks. The keys that everyone should be aware of are:

Credit for first-time homebuyers. Last year, a refundable credit equal to 10% of the purchase price of a principal residence was made available to qualified first-time homebuyers. This credit was set to expire July 1, 2009, but ARRA extends its availability to purchases made before Dec. 1, 2009. For qualifying purchases made after Dec. 31, 2008, the act also increases the maximum credit from $7,500 to $8,000. Perhaps most significant, the act eliminates the repayment obligation for taxpayers whose qualifying purchase occurs after Dec. 31, 2008 except in situations where a home is sold within three years of purchase.

American Opportunity education credit (previously called the Hope credit). For 2009 and 2010, ARRA expands this credit to cover 100% of the first $2,000 of tuition. This would also include related expenses (including books) and 25% of the next $2,000 of such expenses. The maximum credit, for the first four years of postsecondary education is $2,500 per year. (The Hope credit only applied to the first two years of postsecondary education and the maximum credit available was $1,800.) The credit phases out anywhere from $80,000 to $160,000 for filers with AGIs.

529 savings plans. Usually tax free distributions included in the 529 plan are tuition, room, board, mandatory fees and books. ARRA will include computers and computer technology under the definition of qualified education for 2009 and 2010.

Help given to laid-off workers. Although the ARRAs typical focal point is on working Americans, it also offers tax relief for laid-off workers by suspending federal income tax on the first $2,400 of unemployment benefits.

What is Personal Financial Planning?

Expert guidance by professionals for the improved coordination of financial decision making to satisfy life and estate needs. Direction of portfolio (asset/liability) decisions. Fulfillment of portfolio needs through specific product and vendor choices.

Is Personal Financial Planning Necessary?

In order to sufficiently organize your finances in such a way as to reduce taxes, maximize investment opportunities, save time, and appropriately distribute risk, you should engage in at least some form of personal financial planning.

But Can’t I Accomplish That Myself?

Perhaps, but will you? Most business people and professionals are finding it increasingly difficult to plan adequately for their personal financial growth and security. Among the most common reasons for their frustrations are:

- No time

- Too many different investment opportunities

- The complexity of ever-changing tax laws

- Untangling employee compensation and benefits

In General, What is Included in a Financial Plan?

A plan may range from 50 to 150 pages, based on the complexity of circumstances and the degree of explanation and detail:

- Cash Flow Analysis

- Debt and Investment Capital Management

- Estate Planning Analysis

- Tax and Planning Projections

- Retirement (forecasting benefits, costs and options)

- Insurance Needs Assessment

- Educational Funding

- Employee Benefit Analysis

- Closely-held Business Analysis

What Role Do I Take in the Planning Process?

You and your spouse provide information about your personal and family goals, attitudes about taxes, indebtedness, investment risk and security. Your financial plan will take this information into consideration. You will also be called upon to update this data at least once each year.

Are Fees for Financial Plans Tax Deductible?

Yes. Expenses for investment and tax planning are deductible as itemized expenses, subject to limitations – IRS Section 212.

How Can I Measure the Worth of Financial Planning?

After your situation has been sufficiently analyzed and recommendations have been made, you will be able to compare the cost of the plan to the savings that the plan projects for the future. In the long-term the savings should far exceed the cost of the plan preparation.

Will Personal Financial Planning Make Me Rich?

Unfortunately, there are no get-rich-quick schemes that really work. All the more reason for personal financial planning; it can help you keep more of what you earn and keep your savings working harder. It does this by:

- Productivity of assets are increased

- Provides growth and security for your family

- Broadening asset class structure to increase risk management

- Introduction to new investment opportunities

- Increased income through tax planning

- Selection of investment strategies are more closely analyzed

- Minimizes the negative effects of disability, early retirement, and death