As National Financial Planning Month, October serves as a good opportunity for an annual check-up on your financial health to ensure you’re on track to meet your goals. Whether those goals are specific to Retirement or not, regular checks can help prevent any unnecessary surprises.
Moreover, if you haven’t set any goals, now is the time to make them. Remember, it’s never too late to start planning for Retirement; if you’re 21 or 61, having a plan in place is always better than no plan at all.
But what does a “check-in” mean exactly? If you’ve never conducted one, it can be a bit confusing where to start. As you think about your financial plan this month, the following questions might help clarify the process.
Are your goals still the same?
As we age into new phases of our lives, it’s common for goals to shift in one direction or another. For instance, you could decide it’s more important to move to a warmer climate than travel the world, or perhaps you want to build up your estate for future generations. It’s unlikely you have the same goals for Retirement at 55 that you did at 30, and that’s okay, provided you can realign your financial plan with your newfound dreams.
Are external circumstances still the same?
Along with our goals, the environment can also change. From shifting interest rates to stock market performance to unexpected health care needs, life can throw a number of curveballs requiring you to adapt accordingly.
Is your level of risk still the same?
As we grow older, our tolerance for risk tends to decrease. In our earlier working years, it’s more acceptable to try out riskier investments or Retirement products because we still have time to make up any unexpected losses. However, as we age, options that provide more security tend to become more attractive. For example, fixed indexed annuities (FIAs), which can provide guaranteed lifetime income, are becoming increasingly popular among pre-retirees for their ability to reduce fears over running out of money during Retirement.
Is your advisor still right for you?
A qualified financial professional can be an invaluable asset when planning for Retirement, but as your goals change over time, you may find yours is no longer the best fit. If you feel out of sync, use October to ask your family, neighbors and friends for their thoughts and experiences with a financial professional. Having the right guide can make or break your Retirement, so it’s important to get this relationship right.
You would never leave your physical health to chance, and you shouldn’t approach your finances this way either. Even if you answer “yes” to all four questions above, it’s worth going through the exercise to keep yourself accountable. It’s far easier to correct a misstep in the earlier phases than it is 10 years down the road.
Conversely, if you find that your goals, external circumstances or tolerance for risk have changed, resources like our online calculators or educational videos may help you pivot in a new direction. With the right tools and proper planning, anyone can be Game Ready for life after work.