Financial Planning for Incorporated Professionals

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 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 Personal and your Practice should be addressed.

What does a Financial Plan for an Incorporated Professional include?

There are 2 main objectives your 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 Risk/Planning Management
• Retirement Planning

What does a Personal Financial Plan include?

There are 2 main elements 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 is 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 realize to your goals.

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