Recommitting to Your Financial and Estate Plans

As we enter the summer months, financial planning may be the last thing on your mind. Yet mid-year can be a great time to revisit your financial and estate plans to make sure they’re still aligned with your life and goals.  

It’s hard to believe that the year is almost half over. It feels like just yesterday we were talking about end-of-year tax planning, charitable giving opportunities, and setting goals for the year ahead.

You may want nothing more than to disconnect and unwind for the summer (which we fully support, by the way). However, consider using this period of relative calm to revisit and recommit to your financial and estate plans—especially if your personal or financial circumstances have changed since the beginning of the year. Then you can enjoy the summer, knowing your finances and long-term plans are in order.

Three questions to ask yourself before recommitting to your financial and estate plans:

#1: Have my circumstances changed at home or at work?

With the pandemic waning, many of us are using this time to move forward with plans that were put on hold during the shutdown. For example, you may be planning a wedding, expanding your family, or launching a new business in a less threatening environment.

In addition, the pandemic forced many older Americans to reevaluate their retirement plans. Indeed, millions of baby boomers retired early due to the Covid-19 pandemic, either by choice or necessity. Meanwhile, many more workers have quit their jobs, changed careers, or are looking for new opportunities as The Great Reshuffle persists.

If your circumstances have changed at home or at work, it’s important to assess the potential impact on your financial and estate plans. For instance, an expansion of your family may prompt changes to your beneficiaries and other end-of-life wishes. Moreover, any changes to your career path or retirement timeline may warrant a change to your savings rate and investment plan.

At the end of the day, your financial plan is a living document that changes alongside your circumstances and goals. If you’ve experienced any major life changes since the last time you updated your plans, now may be the right time to make any necessary adjustments.

#2: Have my financial goals changed?

Oftentimes our financial goals are vague, especially if they’re far in the future. For example, you may be saving for retirement but have no definitive plans for when you’d like to retire. Or perhaps you dream of buying a second home, but you’ve never taken the time to decide what type of home or where.

Having open-ended plans isn’t necessarily problematic. However, as your personal and financial circumstances change, your goals may change, too.

If your financial goals have changed since the last time you updated your financial and estate plans, be sure to discuss them with your financial planner and estate planning attorney. This will help ensure you’re still on the right track to achieving your objectives without taking on undue risk along the way. In addition, keeping your estate plan up to date will increase the likelihood that the legacy you ultimately leave behind reflects your wishes.

#3: Have external conditions changed?

After a relatively calm 2021, 2022 has been anything but. Market volatility is spiking, inflation is sky-high, and interest rates are on the rise. Meanwhile, the bond market offers little peace of mind to investors seeking a safe haven.

As long-term investors, we don’t advocate changing your investment plan simply due to market movement. In fact, studies show that investors who try to time the market often get worse results than those who stay the course. Still, evolving external conditions may affect your financial plans, especially when they relate to the tax code or other regulatory policies.

For instance, the SECURE Act of 2019 made a number of changes to the way Americans save for retirement and draw down their retirement accounts. As an example, the SECURE Act increased the age retirees must begin taking required minimum distributions (RMDs). It also changed the rules for inherited IRAs. Now, most non-spousal beneficiaries must draw down account balances within 10 years of taking ownership.

Policy changes like these can have a significant impact on your plans. Periodically revisiting and recommitting to your financial and estate plans can help you adjust course as the world around you changes.

A Trusted Advisor Can Help You Recommit to Your Financial and Estate Plans

Ideally, our financial and estate plans reflect life’s many changes–marriage, children, retirement, and ultimately, the legacies we leave behind. Over time, our circumstances, family dynamics, and goals can change dramatically and sometimes unexpectedly. A mid-year check-in can help you ensure your plans are still in line with the life you have, as well as the future you envision for yourself.

And, you don’t have to go it alone. A trusted financial advisor like SageMint Wealth can help you develop a comprehensive financial plan and investment strategy that reflects your life, values, and goals. We’ll also make sure you proactively update your plans when necessary.

If you’d like to speak with a member of our team, we encourage you to get in touch. We’d love to hear from you.