BY: Laurie Saint, CPA®
Assistant Vice President, Financial Planning, AmeriTrust
Here’s a simple, but important question our team always asks someone seeking advice on managing their wealth: When was the last time you met with your advisor to thoroughly review and update your financial plan? If the answer is either “I can’t remember” or “More than a year ago,” then it is probably a good time to revisit your financial goals and investments.
Your financial plan is not a “set it and forget it” document. Odds are that something in your life changed since you last met with your advisor, and that change could likely impact how you are spending and saving your money, and your plan to pass down your wealth to loved ones. Here are three ways an updated financial plan can help you sleep well at night:
1| Incorporates important life changes
The best financial plans go beyond dollars and cents. Sure, the financial data is important because it is the basis for forecasting how your wealth could grow. That forecast, however, is based on assumptions about how the future will play out.
But to paraphrase a well-known adage, “life happens,” and when it does you will need to revisit those assumptions. The birth or adoption of a child or grandchild or the death or disability of a family member – those are enormous life changes that could impact your financial plan. Through open, direct conversations with your financial advisor, you can talk about unexpected or impending changes in your life and how your financial plan should be adjusted.
2| Reflects new laws or significant economic changes
Changes in your personal life are only one way your financial plan can be affected. Changes in the financial markets and tax regulations could also require adjustments to your plan. Passage of the 2017 Tax Cuts and Jobs Act and the SECURE Act in December 2019, for example, significantly changed regulations on estate tax and retirement savings. And today’s surging inflation could have a lasting impact on how much money you spend during retirement. Your financial advisor will help you fine-tune your plan to incorporate such macroeconomic events.
3| Provides you confidence in retirement or the need for change
Money worries and elevated stress levels go hand-in-hand. A survey by CreditWise found that concerns about finances was the number one cause of stress (73% of those polled), ahead of politics (59%), work (49%) and family (46%).
Reviewing and updating your financial plan can give you confidence that you are on track to achieve your goals. It can give you peace of mind or serve as an early warning system that lets you know changes are necessary so your capital assets will last you through retirement.
Eleanor Roosevelt famously said, “It takes as much energy to wish as it does to plan.” Do yourself a favor. Take the time to meet with your advisor and update your financial plan so you can make your wishes come true.
