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Have You Had Your (financial) Health Checkup This Year?

Have You Had Your (financial) Health Checkup This Year?

| March 15, 2019
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Most people recognize that annual checkups with your doctor are a critical part of wellness and preventative healthcare, but are you caring as closely for your financial health? It’s just as important to do an annual or semi-annual analysis of financial health and investments with your financial advisor. The volatility of the market in 2018 was a good reminder of the importance of regular check ins to track the progress being made toward retirement goals. The focus at these annual or semiannual meetings should be on progress towards lifetime financial goals, with measurable and realistic smaller goals as benchmarks. Short term performance can cause a lot of stress and poor decision making financially. Checkups help to keep the big picture in mind, as short-term performance is not as important as where you are overall in meeting your goals. Regular review of your retirement strategy with your advisor can reduce stress and enhance future financial wellbeing.

At its most basic, a review of your retirement strategy should include these three questions:

  • How do you see your retirement lifestyle?
  • What spending plans do you have or anticipate?
  • Are these plans reasonable given the sources of income you will have during retirement?

These three questions help to define your investment goals and identify the appropriate risk level needed to manage your assets toward achieving them. Discussing your retirement strategy once or twice in a lifetime isn’t enough to adjust for important changes throughout life. As retirement approaches, shifts in strategy will be necessary. For example, healthcare costs tend to rise as we age. Significant health problems would necessitate greater savings to cover future costs during retirement.

As research on spending and investment habits progress, new information about successful retirement planning continues to evolve. Its now known that people spend more than previously thought, during the transition into retirement, which could throw off retirement goals. A financial advisor who regularly keeps on top of research advancements in retirement strategy can help your plan stay on track. Financial needs and spending habits change as you age, as does the cost of living. These changes need to be regularly considered and accounted for or calculations on future spending may be inaccurate. As medicine advances and people live longer, is there a potential of outliving your resources? If you live longer than expected, will your savings reach them? New research is available all the time which can help you invest and manage your retirement plan more effectively.

Regular check ups with your financial planner is just what the (investment) doctor ordered.  Contact me if you are interested in having a discussion.   





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