Long Term Planning Requires Annual Reviews

Long-Term Planning

A lot can happen in the course of one year, and it usually does, so be sure to schedule annual reviews into your long term planning efforts.

An Annual Review of Your Long Term Planning Will Help You Make Timely Course Corrections

From your health to your income to the place you live, the likelihood of significant change is high. And as your situations change, you do too:  Your priorities shift, and your goals evolve.

Because life isn’t static, your finances aren’t either. And that’s why annual reviews of your long term planning are so important.

Annual reviews of your long term planning are a time to take stock of what’s happened over the past year, and to evaluate how it could affect your future. These reviews allow you to make the adjustments needed to stay on track toward achieving your long-term planning goals.

Your Annual Review of Your Long Term Planning Should Be Comprehensive

Your annual review of your long term planning should revisit key questions about your finances, including:

  • Whether your spending, saving and investments are meeting the long term planning benchmarks laid out in your retirement plan. Remember: How you manage your income is one of the biggest predictors of your financial success. Having a plan is a great start, and if the markets do well that’s terrific – but none of it matters if your income isn’t going to the right places in the right amounts.
  • Whether your forecast retirement income is still adequate to meet your needs. Retirement plans aren’t cast in stone:  Any number of factors can prompt you to update your long term planning, including losing or gaining a spouse, deciding you want to relocate to be near the kids, or medical conditions that will require extra care.
  • Whether your tax rates have changed, and whether certain strategies can be implemented to boost your after-tax returns. Taxes are the biggest single expense involved in investing. Practicing vigilance can help you keep them to a minimum in your long term planning efforts.
  • Whether your debt structure is most advantageous to you. By analyzing your debts, you can help ensure that debt is helping you achieve your long term planning goals rather than putting them at risk and out of reach.
  • Whether you are properly protected with the appropriate insurance coverage. Unforeseen circumstances can derail the best long term planning. Insurance can protect you against the unexpected, but only if it’s the right type and amount.

Other important areas to update include making sure your assets are properly titled and your beneficiary designations are updated. It’s also critical to make sure your estate plan is up to date, especially if there have been family changes such as marriage, divorce or new children.

Short Term Course Corrections Are Essential to Your Planning Efforts

It’s hard to overstate how short-term changes from year to year can negatively impact your long term planning goals. If an ocean liner is a couple of degrees off course, it can end its journey in the wrong country. But small corrections, made early on, can keep it on course toward its destination. And so it is with course corrections with your planning efforts.

Annual reviews help you harmonize your long term and short term planning efforts and improve your odds of achieving your goals and positioning you in your place of greatest potential.

If you would like to add an annual review to bolster your long term planning efforts and enhance your long term financial planning process, we may be able to help.

Financial Planning.

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