Most people have dozens of financial priorities competing for attention at any given time. Sitting down for an annual review can help you sift through those priorities and ensure that you are still on track to meet your goals. Though reviews are a personalized process, your financial checkup should cover the following general areas:
Financial goals: What are the goals your financial strategies need to support? Many people are working toward more than just retirement; some are preparing to send children to college and may need to provide future financial support once they graduate. Others have elderly parents or relatives who will need help as they age.
Savings: A review of your savings rate should answer the simple question: are you saving enough to meet your financial goals? If not, it’s good to know now so that you can make adjustments to your spending patterns and budget to boost your savings. If you are, you can feel good about being ahead of the game.
Investments: Many investors don’t pay much attention to their portfolio when markets are up. However, your long-term picture shouldn’t depend on short-term market movements. A regular review helps keep your strategy on track and gives you the opportunity to make changes where necessary.
Retirement preparations: Depending on where you are relative to your target retirement date, you may need to do a comprehensive review of your retirement strategies to determine how you stand in terms of your savings, withdrawal rates, and income targets. Even if you’re far from retirement, just knowing that you’re on course to meet your needed retirement nest egg can be reassuring.
Asset protection and preservation: Your annual checkup should also help you review your life insurance to make sure that your policies are still in force and meet your needs. It’s also an excellent opportunity to review the beneficiaries on your insurance policies, retirement accounts, and investment accounts. If you don’t already have updated estate documents like a will, power of attorney, and health care proxy, ask your financial professional to connect you with an experienced estate attorney.
Next steps
An annual financial checkup is an important part of executing your financial strategies and achieving your financial goals. Your goal should be to walk away from the meeting with a good understanding of where you are financially and feeling confident that you are headed in the right direction.
If you haven’t reviewed your financial strategies recently, please contact us to set up a comprehensive checkup.