Three Key Times to Revisit and Revise Your Retirement Plan Strategy
Michael Baum, CFP® RICP®
Vice President & Associate Financial Advisor
Determining when to revisit your retirement strategy is a critical aspect of financial planning. Whether triggered by career changes, major life events, shifts in risk capacity, or external factors, reassessing your financial strategy ensures it aligns with your current circumstances.
There are various situations that warrant a reevaluation of your retirement strategy. Being proactive about doing that evaluation and making any necessary changes can make a huge impact on the security and prosperity of your financial future.
Some conversations will happen at set times, such as when you or your spouse turn the ages of 59, 65, and 70½ – key ages related to retirement and retirement savings. But there are plenty of key moments well before retirement when you should talk with a financial advisor. Here are a few of the most common to look out for, and act upon.
You (Or Your Partner or Dependents) Have Had a Major Life Change
Major life changes are almost always an important time to check in with your financial advisor.
If you've had a major change in your career – whether you’ve quit a job or been laid off, gotten a new job, received a raise or promotion, or you’re starting or selling a business – that's a good time to talk about the impact on your short-term finances and possible adjustments to your long-term financial strategy.
If there’s recently been a marriage, divorce, birth, or death in the family, you’ll want to talk with your advisor about possible changes to your beneficiaries. You should also talk with your advisor if your or any of your dependents’ health has deteriorated, as that can have a great impact on your long-term financial strategy as well. If you or your partner has become a caregiver, this could also be cause for discussion, as the impact on that person’s long-term income is likely to require adjustments to his or her financial plan.
You’ve Had a Change In Your Risk Capacity or Asset Valuation
Many of these conversation-worthy situations are financial in nature. For example, if your risk capacity has changed. What does that mean? It means a change in your ability to weather a financial risk, such as:
A change in your capacity to take on risk is always a cause to speak with your financial advisor. The degree of financial risk you’re comfortably able to take will very likely change over time. It may gradually lessen as you get older for example, if you need most of your assets for retirement. But it may change suddenly as well. For example, if you have more cash or wealth at your disposal through some sort of windfall, your risk tolerance may rise. If you experience a considerable loss, your tolerance may decline. Be sure to talk with your advisor as these changes happen so that he or she can adjust your short- and long-term strategies accordingly.
Another consideration is whether the value of your assets themselves has changed, altering your wealth profile for good or for ill. How about gifting, whether within your family or to a charity? A significant gift, such as a philanthropic endeavor, would be a reason to look at your strategy. Have you purchased or sold a major asset on the level of a house or business? How about a major change to your debt profile, whether it's an increase or a decrease? It can even be as simple as having a major change of mind about your estate strategy, including changing beneficiaries or altering gifts you intend for charities and other entities.
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External Factors and Regular Maintenance
There are other reasons to take another look at your financial strategy that may have nothing to do with your financial situation directly but instead relate to outside factors. A major change in tax policy or law is one example.
Finally, there's always the possibility that it's been a year or two and it's just time to look over your strategy and see if there's anything that needs your attention. Like any strategy or plan, it only works if it’s kept up to date so it’s important to review and revise as necessary on a regular basis – ideally at least once a year but every six months is even better.
Of course, the worst strategy of all is no strategy. Having a retirement plan alone isn’t enough; a strategic financial advisor will help you to put those retirement savings – and every other component of your finances – into a comprehensive plan designed to help you make the most of all the assets you have, both now and over the long term. That’s just what our Plan Well, Invest Well, Live Well™ process does for our clients here at Weiss, Hale & Zahansky Strategic Financial Advisors. If you’re ready to build a strategic financial plan to help you and your loved ones to Live Well, you can request a complimentary consultation on our website or call us at (860) 928-2341.
Presented by Vice President, Associate Financial Advisor, Michael Baum, CFP® RICP®. Securities and advisory services are offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. Weiss, Hale & Zahansky Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084. 860-928-2341. www.whzwealth.com.
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