The importance of reviewing your financial plan annually

I am reminded often of the importance of reviewing a client’s financial plan on an annual basis.   The original financial plan is relevant at the time it is drawn up, and we do our best to forecast future eventualities based on the clients plans and goals.  However, as we all know, life happens and the financial plan often needs to be adjusted as circumstances change.

The following items should be reviewed on an annual basis with your financial planner:

  • Your current income requirements and expected lump sum withdrawals in the future
  • Calculate how long your retirement savings will last given any changes in variables (interest rates etc.)
  • Revise your investment strategy to ensure it is still appropriate and make any necessary changes
  • Given any changes in tax legislation, check to see if your income is still being drawn tax efficiently
  • Check to see if there have been any legislation changes that will effect your retirement
  • Discuss the Capital Gains tax implications for making any changes to your investments
  • If you still have life cover review it to assess whether it is still appropriate or required
  • Review the beneficiaries on your various investments to ensure they are still in line with your current wishes
  • Review your Will:

Is your Will up to date and still in line with your current wishes?

Do you know where your original Will is?

Is it signed correctly?

  • Make sure you understand how your monies are being invested and what fees you are paying
  • If you have a trust:

Ensure your financials are up to date

Check if your annual tax returns been submitted

Ensure the annual donations are being made to the trust

Make sure you understand the estate duty implications in the event of your spouse/partner passing away

Not all of these topics will be applicable to everyone, but they are a good guide for your review meetings.   It is astounding how easily some of these aspects are overlooked, and which can have disastrous effects if not corrected in time.

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