Retirement Strategy: When and How to Update Your Retirement Plan

Retirement Strategy: When and How to Update Your Retirement Plan

November 29, 2022

You work hard, create a plan, are on the way to or have achieved retirement, and are living life. Retirement is a long period, though; as time passes, things change. That plan you made might not really fit the current situation anymore, and you might need to make some changes. The question becomes; just how often and when should you be revisiting your strategy? 

Job Progressions

First off, when you've had a major change in your career, that's a good time to talk about your strategy. That change can be getting a new job, quitting, or being laid off. It can also be a promotion or a raise. Whether or not you've had a change in your main job, starting or selling a business enterprise is another cause for conversation.

Family Updates

Situations in which there has been a significant change in your or your family's lives are good times to reconnect with your financial professional. Essentially, these events are situations in which your beneficiaries might change. These include marriages, divorces, births, and deaths. Not all these circumstances are life and death; it could be as simple (or complicated) as moving to another state, country, or even just up the street. If one of your family members has become a caregiver, this could be an important conversation starter. Some conversations will happen at set times, such as when you or your spouse turn the key ages of 59, 65, and 72. Another time to notify your trusted financial professional is if your health has deteriorated; this includes mental and emotional health.

Financial Considerations

Many of these conversation-worthy situations are financial in nature. For example, if your risk capacity has changed. What does that mean? It means changing your ability to weather a financial risk, such as having more cash or wealth at your disposal through some sort of windfall. This can also go in the other direction if you experience a considerable loss. Another consideration is whether the value of your assets has changed, altering your wealth profile for good or for ill. How about gifting, whether within your family or to a charity? A significant gift, such as a philanthropic endeavor, would be a reason to consider your strategy. Have you purchased or sold a major asset on the level of a house or business? How about a major change to your debt profile, whether it's an increase or a decrease? It can even be as simple as having a significant change of mind about your estate strategy, including changing beneficiaries or altering gifts you intend for charities and other entities.

There are many other reasons to take another look at your financial strategy that may have nothing to do with your financial situation directly but instead relate to outside factors. A major change in tax policy or law is one example. Maybe you've made some changes to your legal and financial team or plan to name a different executor to your will. Perhaps you've had a change in your household that has upsized or downsized your lifestyle. Or maybe you've had a major mishap, like misplacing or losing important documents.

Finally, there's always the possibility that it's been a year or two, and it's just time to look over your strategy and see if there's anything that needs your attention.

Putting It All Together

Long story short, there are a lot of considerations that go into retirement. When there is a meaningful change in any of them, it’s time to consider how that impacts your goals and if you need to make an adjustment. Regularly reviewing the retirement plan is important, but it doesn’t necessarily have to follow a set schedule. Instead, the impacts of life changes should be analyzed as they happen. 

Whatever the reason, big or small, if you have a change you want to talk about, we are more than happy to help.

This material is provided as a courtesy and for educational purposes only. Investing involves risk including loss of principal.  Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation. This article contains links to articles or other information that may be contained on a third-party website.  River City Wealth Management is not responsible for and does not control, adopt, or endorse any content contained on any third-party website. The information contained herein is derived from sources deemed to be reliable but cannot be guaranteed. Past performance is not indicative of future results.