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Retirement Plan -When and How to Update It


While you and your financial planner will work to create an overall retirement plan, this does not mean that you won't need to make changes along the way.

So, the question remains: When should you revisit your retirement plan?

First of all, when you've had a major change in your career, that's a good time to review your plan. That change can be getting a new job, quitting, or being laid off. It can also be a promotion or a raise. Or, you can be starting or selling a business enterprise. 

Situations in which there's been a major change in your or your family's lives are good times to reconnect with your financial planner.  For example, there can be a change in beneficiaries resulting from marriages, divorces, births, and deaths. Not all these circumstances are life and death, however; it could be as simple (or 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 59½, 65, and 72 (in 2022) or 73 (in 2023).  Another time to notify your financial planner is if your health has deteriorated; this includes mental and emotional health.

All of these conversation-worthy situations are directly or indirectly 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 having more cash or wealth at your disposal through some sort of windfall. This can also go in the other direction if you experience a considerable loss. Another consideration 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? The desire to make a significant gift, such as a philanthropic endeavor, would be a reason to review your retirement plan with your financial planner, along with your legal advisor, to determine the most tax-efficient way to implement your wishes. Have you purchased or sold a major asset, such as 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.

There are other reasons to take another look at your retirement plan 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. 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 maybe 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's just time to look over your plan, including reviewing key assumptions - inflation, portfolio growth, expected retirement ages - to see if there's anything that needs your attention.

Whatever the reason, big or small, it's good to know that you have a trusted financial professional in your corner who can to help address whatever concern or transition you're facing.  

This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

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