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8 Life Events That You Should Revise Your Financial Plan After

8 Life Events That You Should Revise Your Financial Plan After

| May 02, 2023

Engaging a financial planner you can trust when you begin accumulating assets is the ideal situation. If you start early, you’ll have years to employ the tactics that are best for you and develop healthy habits. But once you have a plan in place, it’s important to remember that regularly reviewing it is important. Life changes all the time, and so do your finances.

Changes in your career, personal life, and retirement goals will likely require shifts to your strategy and are a great time to check in with your financial planner. 

Optimally you’ll have the opportunity to consult with your financial planner before the change, but sometimes life throws a curveball that catches us off guard. Having a relationship with an advisor you trust will help you make minor adjustments as needed, even during complex situations. 

Here are a few significant life events that may prompt a change in your financial plan:

  1. Impending retirement - If you are planning to retire in the next five years (or less), it’s time to take a good look at your financial plan. Now is the perfect time to see if you are where you want to be or if adjustments are needed before you retire. Your advisor may suggest updating your investment and tax strategy to maximize your assets now and post-retirement. 
  2. You just retired - Congratulations! You made it! But before you fully embrace retired life, don’t forget to check in with your financial planner to ensure the transition is complete. They will help you check your retirement benefits, insurance, and taxes to ensure you have what you need to enjoy life! 
  3. A significant decrease in the health of you or your partner - This is crucial if the spouse, who typically manages all the financial decisions, has fallen ill. A financial advisor can inform the surviving spouse of the current situation and adjust the plan as needed. 
  4. The loss of a spouse – Changes to your income, expenses, and taxes are made all the more difficult while dealing with the tragic loss of a loved one
  5. Receiving an inheritance – The loss of a parent frequently comes with a new responsibility for stewardship of the assets they have passed on to you.
  6. Marriage or Remarriage - Joining households with another adult can bring new assets, liabilities, and income to your life. Meeting with your financial planner together will help you merge your financial plans and set new goals as a couple. Your new status will also likely change your life insurance needs, tax planning, and updating beneficiaries on your accounts. 
  7. Divorce or legal separation - Let’s face it - the chances of divorce are high. In the US alone, there is a divorce every 42 seconds. This equates to 86 per hour, 2,046 per day, and 14,364 per week according to a CDC study that only included 44 states (meaning the actual rates are likely much higher). The ramifications of separation on your financial plan can be significant and complex. Working with your financial planner during this time is crucial to ensure your retirement and tax plan are adjusted to meet your needs. In addition, you will likely need to update your life insurance, long-term tax strategy, and beneficiaries. 
  8. Significant changes in your career or a second career-There may be times when your career shifts significantly. For example, you landed a big promotion, made partner, or your small business revenue increased exponentially. On the flip side, maybe you were downsized, decided to go back to school for an advanced degree, or shifted to a lower-paying career path. Increasing or decreasing your income should prompt a full review of your assets, liabilities, and financial plan. Even if the change is temporary, meeting with your financial planner and discussing the next steps would be wise. 

While these changes can happen at any stage of life, those that occur later in life can complicate your financial plan and require the assistance of an experienced financial advisor. When retirement is on the horizon, major life shifts can impact your retirement date, the money you need, or your lifestyle. 

Outside of these specific life events, it’s important to seek an advisor when you realize your previous plan is inadequate for the future you want.Sometimes the financial plan you created in the past no longer meets your needs because you haven’t worked with a financial planner or haven’t met with one in a long time. An experienced financial planner will help you evaluate where you are, dream about where you want to be, and create a comprehensive financial plan to help you get there.

The team at Bestgate Wealth Advisors can not only help you with a financial plan that fits your needs, but we can also help you understand the tax implications and make the necessary adjustments to ensure that you’re prepared for the retirement of your dreams. Please reach out here to request a consultation today.