When should you reassess your retirement plan?

Throughout our lives, we can experience different events and milestones that may shift our goals and priorities. When this happens, it’s important to review our retirement plan and make adjustments if necessary. Regular reviews can help keep a retirement income strategy current, offering greater confidence that we're prepared for whatever the future may bring.

Financial planning for retirement

Sound financial planning can be essential for creating a secure and enjoyable retirement. It can help individuals establish clear financial goals, manage potential risks, and ensure they have adequate resources to sustain their desired lifestyle in the absence of regular income. After setting up a retirement strategy, it’s important to periodically review and adjust the plan, particularly following significant life changes.

Getting married or divorced

Combining or separating finances can be a complex process. If marital status changes, it can be helpful to review beneficiary designations on financial and retirement accounts, annuities, and life insurance so they reflect your current status and wishes.

Having kids

Starting a family is a major life event that often triggers a retirement plan review. Financial responsibilities such as education, healthcare, and daily living expenses can impact the capacity to save for retirement. In fact, experts estimate that raising a child to age 18 can cost nearly $240,000.

As a result, adjusting saving strategies or financial goals may be necessary to accommodate these new responsibilities and ensure adequate preparation for both your children’s future and your retirement. Revising the plan can help balance these financial priorities and maintain progress toward retirement goals.

Additionally, as a family grows, evaluating life insurance coverage may be important to ensure that the children are well-protected.

Changing jobs

When you receive a promotion or begin a new job, it can be a great chance to boost your retirement savings. A new position might come with a different retirement plan, additional investment choices, or an enhanced 401(k) match from your employer. Even an increase of 1% or 2% in contributions can significantly enhance future savings. Conversely, if a person encounters unexpected challenges, such as job loss or leaving the workforce, it might be time to reassess a budget and adjust saving and spending priorities accordingly.

Moving

Relocating to a new home can mark a new beginning. Along with updating accounts with a new address, it can be an excellent time to review your budget, particularly if your mortgage or rent payments have changed.

New dreams for retirement

For those with new retirement dreams, such as traveling or moving to a new place, it’s a good idea to evaluate if there is adequate financial flexibility to reach these goals after retiring. Examining a retirement plan can highlight how these new aspirations might affect projected finances and other retirement objectives.

How to decide if you need to rebalance your 401(k) and retirement assets

Over time, fluctuations in the market and changes in the performance of individual assets may create an imbalance in a retirement portfolio, leading to some investments being overrepresented while others may underperform. There may be times when rebalancing is necessary to help ensure your portfolio remains aligned with your desired risk level, financial goals, and retirement timeline.

Consulting a financial professional after significant life events can be beneficial for evaluating a retirement plan and determining if adjustments or rebalancing are needed. This meeting can also serve as an opportunity to explore additional ways to diversify a financial portfolio, such as incorporating an annuity for guaranteed retirement income. Engaging with an expert can help address changing financial needs and ensures that your financial plan stays aligned with long-term goals, supporting a secure and comfortable retirement.

The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.

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