When is it time to revisit a retirement plan?

To make sure your retirement plan is on track, it’s important to review it regularly and determine if you need to make any updates, especially if you’ve experienced a big life event. By doing so, you can help ensure your plan continues to align with your changing goals and financial situation.

Financial planning for retirement

Effective financial planning is critical to helping build a secure and comfortable retirement by allowing a person to set clear goals, manage risks, and ensure there are enough resources to maintain a desired lifestyle when there is no longer regular income. Once a retirement strategy is in place, it’s a good idea to revisit and rebalance this plan, if necessary, especially following certain life events.

Changing jobs

Following a promotion or starting a new job, there may be an opportunity to increase the amount that is put toward retirement. A new job can offer a new retirement plan, different investment options, and possibly a new 401(k) match from an employer. Increasing contributions by just 1% or 2% can have a significant impact on what is saved for the future. Of course, sometimes life can throw a curveball, and a person loses their job or is forced to leave the workforce. In this case, it is important to review the budget and reevaluate saving and spending priorities.

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.

Reaching a retirement dream

If you have new dreams for retirement, like traveling the world or relocating, it’s essential to assess whether there is sufficient financial flexibility to achieve these aspirations after leaving the workforce. Reviewing a retirement plan can reveal how the new goal will impact projected finances and other aspirations for the golden years.

Moving

A move to a new home can represent a fresh start. Updating the change of address for accounts can also be a good opportunity to revise your budget, especially if there are changes to mortgage or rent payments.

Having kids

Having children is a significant life event that can trigger the need to update a retirement plan. The financial responsibilities associated with raising children, such as education costs, healthcare, and daily expenses, can affect the ability to save for retirement. In fact, experts estimate it can cost almost $240,000 to raise a child to age 18.

Parents may need to adjust their saving strategies or financial goals to account for these new responsibilities and ensure they are adequately preparing for both their children's future and their own retirement. Updating the plan can help balance these competing financial priorities and maintain progress toward your retirement.

In addition to considering the financial implications to retirement planning, you may want to evaluate your life insurance coverage to help ensure your children are protected.

Should I rebalance my 401(k) and retirement assets?

Over time, market fluctuations and shifts in individual asset performance may lead to an imbalance in a retirement portfolio, where certain investments may become overrepresented while others 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.

Talking to a financial professional following life events can help you evaluate your retirement plan and determine if changes or rebalancing make sense. This can also provide an opportunity to discuss ways to further diversify a financial portfolio, like adding an annuity for guaranteed retirement income. By meeting with an expert, you can address evolving financial needs and ensure your financial plan remains aligned with your long-term goals and supports 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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