In today’s economic climate, the only constant is change. With each passing year, new retirement account contribution limits, revised tax rules, and personal lifestyle shifts make it important to revisit your retirement savings strategy. In this article, we’ll explain five steps you can follow to enhance your financial fitness for 2025 and beyond by creating a financial action plan.

What Is a Financial Action Plan?

A financial action plan is a strategic roadmap intentionally crafted for managing your money with purpose. Unlike more ambiguous planning exercises, a financial action plan focuses on specific steps you can take today to work toward your ideal retirement—and beyond.

Perhaps most critically, a financial action plan contains self-correcting mechanisms and feedback loops you can use to monitor your performance and make adjustments if needed. After all, what’s the benefit of a plan if it doesn’t improve over time?

How To Create a Financial Plan for 2025

Creating an effective plan is straightforward, but it isn’t necessarily easy. With this five-step framework, you’ll have the tools you need to create a plan that fits your particular needs.

An experienced advisor can make all the difference in creating a successful retirement plan. Wealth Enhancement offers a complimentary financial review meeting to help you get started.

Step 1. Record your starting point

Knowing where you stand today is a prerequisite for establishing clear goals. Only then can you implement processes to carry you toward your retirement vision. In this first step, you’ll gain a fuller understanding of your current financial status, which can enable better decisions later.

• Inventory your finances. List your assets and liabilities, including cash holdings, investments, and long-term expenses (such as a mortgage or car loan).
• Include your non-financial documents, such as estate planning documents, insurance policies, and real estate holdings. Think wills, trusts, powers of attorney, deeds, declaration pages, and more.
• Get organized. All this work will be for naught if you’re not organized. Designate an accessible place to keep your documents, and develop a system for maintaining a usable level of organization.

After completing these preliminary tasks, consider creating a simple budget if you don’t have one already. A budget can help you track your savings and expenses, and provide insights into where your spending can be better managed.

Step 2. Establish your retirement goals

Now that you have an understanding of your current state, you can establish goals. Your goals are critical for shaping your financial future, so spend time on them, and don’t be afraid to revise them if anything changes.

• Create a picture of your ideal retirement. Consider any plans you have to travel, spend time with family, take up new hobbies, work part time, or volunteer. How much do you value these factors?
• Reflect on your future lifestyle. What excites you at the start of your day? What does your partner expect in retirement? Which activities impact your social life? And perhaps most importantly, could any of these answers change in five years?
• Clarify your values with your partner to identify shared goals. Adventure vs. security; freedom vs. time with family; work vs. play… All of these values will influence your goals.

Think deeply about these questions, and work to envision what you’d like your life to look like after retirement.

Step 3. Create a written plan

At this point, you’ve taken stock of both your finances and your goals, which means it’s time to put pen to paper:

• Prioritize your values. In the previous step, you explored many of your core values. Now, determine which values you’d like to prioritize, which will inform your financial needs.
• Be mindful of your time horizon. Decide when you and your partner would like to retire. This will reveal how much time you have to build your savings.
• Develop a detailed budget to meet your retirement goals by identifying where the money will come from, how you can prepare today, which investments make the most sense for you and your goals, and how taxes will affect your retirement income.
• Reduce the risk of outliving your money by choosing tax-efficient investment vehicles that bucket your holdings into short-, mid-, and long-term time frames. Be sure to include a mix of both taxable and tax-deferred accounts.
• Plan for the unexpected by setting up an estate plan to make sure your loved ones are protected and that your assets can be easily and quickly transitioned to your heirs.

This step is significant in size, which reflects its significant nature. By writing down specific goals that espouse your values and illuminating pathways toward those goals, you lay the foundation for your future retirement.

Click here to access this checklist as a PDF you can download and print.

Step 4. Stay disciplined

Don’t let your plan be like a New Year’s Resolution: there one day and gone the next. Now that it’s in writing, allow your plan to guide you by prioritizing a commitment to it.

• Follow through on your plan. Save early and often, and invest on a consistent basis to take advantage of compound interest. As the adage goes, “time in the market beats timing the market.”
• Maximize your contribution limits wherever possible to increase the odds of reaching your financial goals.
• Take advantage of catch-up provisions available to investors over age 50 (or age 55 for Health Savings Accounts) to further plan your retirement savings.

Step 5. Monitor your performance

The most effective plans are living, flexible organisms that can self-correct over time. Rigid plans break under pressure. Adaptable plans can bend and stretch to account for unexpected events.

• Stay on track toward your goals by keeping an eye on your statements and spending, planning for the possibility of emergencies, and adjusting if needed.
• Review your plan regularly to account for changing realities—from medical emergencies and new tax laws to saving for a grandchild’s education.
• Talk to your financial advisor to understand how lifestyle changes or public policy shifts may affect your retirement savings strategy.

Should You Get Financial Planning Help?

To help you stay on track towards your retirement goals, it’s important to monitor your personal situation and your financial plan on a regular basis. Every Wealth Enhancement advisor is backed by our Roundtable™ of specialists, including a team experienced in estate planning, investment management, and tax planning. If you’re ready to reevaluate your retirement plan, we invite you to schedule a complimentary review with your financial advisor today.

Click here to access this checklist as a PDF you can download and print.

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