5 reasons why annual financial planning review is crucial

Annual financial planning review– You might be asking yourself why do i need one?? I am comfortable with my current saving portfolio, I am too busy to get into the nitty gritty research, I think my investments are doing great….

Things can change in one year, or even 6 months. You do a physical exam every year, don’t you?! Because you know your health is super important – and so is your financial freedom. You should make this a habit

An up-to-date financial plan is especially important in uncertain times. The economy is in constant state of flux; and your investments should make the necessary adjustments to ensure you are fully engaged during periods of volatility. Annual financial planning review serves many purposes- allowing you to evaluate and adjust your goals, ensuring that your strategies are aligned with your goals.

Ongoing economic uncertainty hast made the need for an updated personal finance plan more critical than ever. Consulting your investment professional to start your annual financial planning review is highly recommended. It will help you identify and prioritize the topics that are most important to you.

Here are the five reasons for why you should have an annual financial planning review:

asset-allocation-grocery-basketYour investing goals might have changed: Check your asset allocation to ensure it continues to meet your investment needs and preferences. Evaluate your retirement portfolio and assess whether you are on track to achieve you savings goals. Perform any re-balancing that might be necessary in light last year’s market performance. Take a look at specific investment (Mutual funds, Bonds, stocks), evaluate if they continue to have a role in your portfolio.

401-retirementYou could be paying more taxes: Tax efficient strategies could help you reduce the tax hit on your investments and increasing your after-tax returns. Take advantage by contributing to 401(k) plan, by investing in tax-exempt bonds or by choosing tax-managed mutual funds. Also, be wise about the types of accounts you invest in, monitor deductions and distributions, know when to sell and when to hold. Consult with your financial advisor.


Your retirement plan might not reflect your last priorities: An annual financial planning review should assess your retirement plans from the view point of both lifestyle and financial needs. Check your progress toward establishing your retirement income plan. We well conceived retirement plan seeks to establish guarantee lifetime income, enough to cover your essential expenses. Blue metal compassCheck your tax assumptions and determine if they need to be adjusted- your advisor should be able to guide you with the tax rates and how to benefit from them.

Your insurance needs might have changed: Life insurance is a good place to start. Depending on the size of your family, adjust the amount of insurance to protect your loved ones from a devastating loss of income. as you age your health insurance becomes more critical. I suggest you have a good health insurance. Also check your beneficiary designations on all your accounts. Make changes where you see fit.

Your estate planning: Make sure your plan continues to reflect your current family status, financial situation. and latest estate and tax laws.

In summary, an annual financial planning review is well worth the effort
annual financial planning reviewconsidering all the hard work you invested in building and protecting your wealth. It’s very important to have a long-term view of your wealth strategies. Stay focused on your goals and keep your strategies current so you are prepared for whatever this economy has in store.

Some content is courtesy of Fidelity. Fidelity Investments is among the most diversified financial services companies in the world, offering a full range of product solutions for individual investors, employers, institutions and intermediaries. Their fundamental mission is to help customers and clients achieve their financial objectives. Fidelity is one of the largest mutual fund companies, the leading provider of workplace savings plans in the U.S., and the country’s No. 1 provider of Individual Retirement Accounts (IRAs). They offer retirement planning, portfolio guidance, brokerage services and many other financial products and services to more than 20 million individuals and institutions, as well as more than 5,000 financial intermediary firms. I currently have a retirement account with Fidelity.

3 thoughts on “5 reasons why annual financial planning review is crucial”

Leave a Reply