Project #11 – Financial Master Plan

I work at a civil engineering firm and a lot of my day is often spent either preparing or reviewing planning documents.  Imagine if as an Engineer I would say “let’s not worry about design, let’s get started on construction and see how things go”.  The results would most likely be infrastructure of the wrong size, wrong place, wrong purpose, and a waste of money.  With this type of attitude I probably wouldn’t be an engineer for very long.  Planning documents help us stay on task so we accomplish the goals we want.

Luke_scriptureMoving from the engineering field to the personal finance field the same logic can be applied.  I have some general ideas of what I want, but right now I have the same “figure it out as I go” mentality.  Do you ever feel the same way?  I know that isn’t a correct way to plan, so why haven’t I done better?  Maybe it is because I’m so far away from retirement I don’t really want to think about it.  Maybe it’s because I know life is so volatile it is hard to make long term plans.

Don’t get me wrong, I haven’t been totally oblivious to planning for the future.  My wife and I make and keep a monthly budget, and we save money for short and long term emergencies.  I also have a retirement account that I add to from each paycheck.  In fact my 401K account is what got me started thinking about making a financial master plan.  This year my employer stopped matching our 401K contributions.  That is a pretty big blow to my retirement.  The problem is I don’t really have an idea of how big of a blow it is.  How much will this affect my retirement?

This got me thinking some more about retirement and some of my financial goals.  First off I would like to be in a situation that I’m not a financial burden to others.  Second I would like to have enough money that my wife and I can help our children pay for church missions and education.  I know these things can’t become a reality without some sort of blueprint to follow.

Financial-planningSo, this month I’ve decided to make a financial master plan.  The objective of the financial master plan is to show a way to accomplish the financial goals my wife and I have.  I envision that this plan will change over time as life changes.   Change is inevitable, but having a blueprint will help guide us in making the financial decisions we have today.

I’ve made an outline of the financial master plan here.


I think most of us would agree that we want to retire with enough financial freedom to be able to accomplish our goals.  Without a plan in place, the reality of this retirement goal is a bit hazy.  In the article “How much money do I need for retirement?” I investigate the important aspects that are needed in making a financial retirement plan.   These are:

  • What age you plan to retire, and what the projected retirement age will be,
  • Your expected living expenses when you retire,
  • Expected inflation, and
  • Expected interest earned on retirement savings.