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When and How to Update Your Retirement Plan Thumbnail

When and How to Update Your Retirement Plan

Although you and your financial professional worked hard to create an overall retirement strategy, you will likely need to make changes along the way.

So, the question is: When should you revisit your retirement strategy?

Firstly, if you've had a major change in your career, that's a good time to talk about your strategy. That change could be getting a new job, quitting, or being laid off. It could also be a promotion or a raise. Even if you haven't had a change in your primary job, starting or selling a business enterprise is another excellent reason to have a conversation.

Situations in which there's been a major change in your or your family's lives are good times to reconnect with your financial professional as well. Essentially, these events are a good opportunity to think about your beneficiaries and if they should change. These include marriages, divorces, births, and deaths. Not all these circumstances are life and death; it could be as simple (or as complicated) as moving to another state, country, or even just up the street. If one of your family members has become a caregiver, this could be an important conversation starter. Some conversations will happen at set times, such as when you or your spouse turn the key ages of 59, 65, and 72. Another time to notify your trusted financial professional is if your health is deteriorating; this includes mental and emotional health.

Many of these conversation-worthy situations are financial in nature. As an example, if your risk capacity has changed you should reach out to your financial advisor. What does that mean? It means a change in your ability to weather a financial risk, such as having more cash or wealth at your disposal through some sort of windfall. This can also go in the opposite direction if you experience a considerable loss. Another thing to examine is whether the value of your assets 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 great reason to take a look at your strategy. Have you purchased or sold a major asset on the level of a home 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.

There are other reasons to take a 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 excellent example. Maybe you've made some changes to your legal and financial team or plan to name a different executor to your will. Perhaps you've had a change in your household that has upsized or downsized your lifestyle. Or possibly you've had a major mishap, like misplacing or losing important documents.

Finally, there's always the possibility that it's been a year or two and it is just time to look over your strategy and see if there's anything that needs your attention.

Whatever the reason, big or small, your trusted financial professional will be more than happy to help you through whatever concern or transition you're facing.