When was the last time you reviewed your financial plan?

Last week while talking to a prospective client I asked, “Have you ever had a financial plan completed for you?”. She answered matter-of-factly “Yes, I’ve already done that.” Then I asked my follow up question, “When was the last time you looked at it or had it updated?”. After a long pause she replied, “Umm, about 10 or 11 years ago.” She was a year away from when she wanted to retire and a) did not know the details of her old plan and b) did not know whether the old plan put her in a position to retire safely.

Whether you are a Wealth Accumulator or about to begin your retirement, everyone needs to have a financial plan. But as my prospective client learned, if you only look at your plan once every ten years, you don’t really have a financial plan.

A financial plan is your financial road map. Just like any “road trip” we go on, our map needs to be reviewed on a regular basis to make sure that we are still on the right course. Additionally, if our destination changes, so should our course. In that sense, a financial plan becomes a living document. As life changes, so should the plan. Although there is no correct time to check your financial plan, you should review it at it at least once a year (during a 4th quarter review for example) or whenever a significant life event occurs.

Whenever you review your financial plan, here are 5 points and questions to consider:

  1. Risk: Does the level of risk in my portfolio and my financial plan match my risk tolerance? As we age, typically we should reduce our risk exposure. But there can be exceptions based on your retirement income needs, time horizon, investment experience, etc. Risk can be managed, but it is important that you are comfortable with whatever amount it takes to achieve your goal. If you don’t know how much risk you can tolerate, here is brief questionnaire to find out.
  2. Goals: Typically, goals during one’s accumulation phase are quite different than during the distribution phase. Are the goals I had when I started the planning process the same goals I have now? Are there any that are no longer relevant? Has what I wanted to achieve in my retirement changed over time? Is there something else I want to be able to do?
  3. Savings: Is the amount I had planned to save reasonable? Sustainable? Am I able to save more now than what I originally planned? If so, is saving more necessary, or would I prefer to use that money on something different? Do I need more liquid assets for emergencies?
  4. Path: Is my financial plan still on the right track? There is more to reviewing a financial plan than just market returns. While we know that markets do not go up every year, you want to be sure that your plan is still consistent with your goals.
  5. Review: Check your plan to make sure it makes sense to you. Does everything look right? Are the assumptions reasonable? Look it over. Then have your advisor explain the math. Remember, “trust but verify.”

While these are good points, they do you no good if you don’t have a plan to begin with. At ARQ Wealth Advisors, we believe in financial planning so much that we include it as part of our management fee for no additional charge. While managing assets is a critical part of what we do, financial planning is just as important.

If you have not looked at your current plan in a long time or don’t have a plan, give us a call. We have over 72 years of industry experience and have implemented thousands of financial plans. As part of our 2nd look program we will help you review the plan you have, or create one at no cost to you.*



James N. Robinson, RICP®,  AIF® 

*If you become a client ; )