1. Life changes:
A change in employment, income, or family makeup can significantly alter your finances and retirement planning. Reviewing how these changes affect your plan will help you avoid surprises down the road.
•Changing a job: Whether you lost your job or are embarking on a new career, you'll need to address your retirement accounts. Explore whether to roll over your account from a
previous employer to another brokerage firm or keep your funds where they are.
•Getting a raise: Once the celebration is over, decide whether you'd like to use some of that bump in pay to increase your retirement investment rate.
•Having a baby (or watching kids graduate): Kids have a big impact on finances at every age. Your ability to save for retirement may ebb and flow with the demands of your family life. Your annual review of retirement accounts is the perfect time to reflect on current and future financial obligations.
•Divorce or death: These are very painful life events. But they happen. Planning for your future significantly changes when your partner is no longer with you. Such a life change may require a retirement plan overhaul.
•Caregiving: Being a caregiver isn't just a physical act, it often has financial implications for you as well. Caregiving situations arise when you bring children into your life, when your spouse or parents need nursing care, or even when your friends require short- or long-term care. Explore how this situation will impact the vision of your retirement and your financial commitments.
There is no right or wrong way to deal with these life changes. But, it's important to engage in conversations that account for these changes as you manage your retirement funds.
2. Determining beneficiaries:
As you accrue retirement assets to improve your Financial Lifestyle, one sensitive area of planning is deciding who will be the beneficiaries of your estate. You may find yourself reassessing that from time to time based on life changes. If so, remember that there are several places where you may need to update this information:
•Will
•Investment funds such as your IRA and 401k
•Home or property assets
•Insurance policies
•Family trust
There are many reasons why someone would need to update or change a previously designated beneficiary. Getting in the habit of regularly reviewing that information will keep your documentation consistent with your personal wishes.