Life Transitions: When to Revisit Your Financial Plan

Summary

A financial plan is something that you’ll need to review as you navigate common life transitions like marriage, divorce, retirement, and more.

7 Instances When It Pays to Review and Re-assess Your Differences

Life is full of transitions, both planned and unexpected, that can have a significant impact on our finances. Whether you are starting a new job, getting married, having a baby, retiring, or experiencing any other significant life transition, it is important to revisit your financial plan to ensure that you are on track to meet your goals. In this article, we will explore seven common life transitions that may require you to review and adjust your financial plan.

1. Changing Jobs

Changing jobs is one of the most common life transitions, as the average American will do so about five times. Leaving one job and starting another can be an exciting time, but it can also impact your finances. If you are starting a new job with a higher salary, you may want to consider increasing your retirement contributions or creating a new budget to accommodate your higher income. On the other hand, if you are transitioning to a job with a lower salary, you may need to reevaluate your budget and make adjustments to ensure that you can still meet your financial goals. If you already have a retirement plan with your current employer, you’ll also have to think about your rollover options.

2. Getting Married

When it comes to life transitions that change your finances in a multitude of ways, marriage is among the biggest. When you get married, you may need to combine your finances with your spouse and create a joint budget. You may also need to review your insurance policies, such as health, life, and auto, to ensure that you have the appropriate coverage for your new family. Additionally, consider creating or updating your estate plan to ensure that your assets are distributed according to your wishes.

3. Expanding Your Family

Expanding your family, whether through birth or adoption, is another life transition that can impact your finances. With a new addition to your family, you will likely need to adjust your budget to accommodate the additional expenses associated with raising a child. Everything from diapers and formula to childcare costs can take a toll on your budget if you don’t plan ahead. You may also want to consider updating your insurance policies and estate planning documents to ensure that your family is protected in the event of an emergency.

4. Buying a Home

Buying a home is a major financial decision that can impact your finances for years to come. If you are in the market for a new primary residence, second home, vacation home, or income property – all of which can be exciting life transitions – you may need to adjust your budget to account for your new mortgage payment, property taxes, and homeowner’s insurance. You may also want to consider creating an emergency fund to cover unexpected home repairs and maintenance costs.

5. Divorce

Though many of the life transitions we’ve discussed thus far are generally happy times, going through a divorce can be a challenging and emotionally taxing experience. It can also have a significant impact on your finances. After a divorce, it is important to revisit your financial plan to ensure that you are able to adjust to your new financial situation. You may need to create a new budget, update your insurance policies, and review your investment portfolio to ensure that you are on track to meet your financial goals as a single person. Additionally, consider revising your estate plan, including updating your will and beneficiary designations. All of these steps can help you move forward with a greater sense of confidence and financial stability.

6. Retirement

Among life transitions, retirement is perhaps the one that most people look forward to and plan for. Obviously, leaving the working world can impact your finances in a variety of ways. As you approach retirement, you may need to adjust your budget to account for changes in your income and expenses. You may also want to create a retirement income plan to ensure that you have enough savings to support your lifestyle throughout your retirement years. Reviewing your investment portfolio is another important task to ensure your asset allocation still aligns with your long-term goals and risk tolerance.

7. Death of a Spouse

Losing a spouse is a difficult and emotional time, and it’s one of those life transitions that forces you to reassess your finances – even though it may be the last thing you want to think about. When your spouse passes away, it is crucial to revisit your financial plan. You may need to adjust your budget, update your insurance policies and beneficiary designations, review your investment portfolio, and adjust to a new normal. Working with a financial professional can help alleviate the challenge of navigating this transition on your own.

Do You Need Assistance Navigating the Financial Impact of Life Transitions?

We have all probably experienced more than a few life transitions already, and you have likely seen first-hand how they can impact your finances. Whether you are changing jobs, getting married, having a baby, buying a home, or approaching retirement, or something else entirely, taking the time to review and adjust your financial plan can help you navigate these changes with confidence and peace of mind.

If you’re looking for a financial advisor in Florida to help you through every phase of life, we can help. At Aviance, we offer personalized wealth planning advice and investment solutions for you and your family. Schedule an introductory meeting with us today to learn more about how we can help you accomplish your goals during life transitions and beyond.

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The effectiveness and potential success of a financial plan depends on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and market conditions. The tax and estate planning information provided is general in nature, which should not be construed as specific financial planning or tax advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. Customized financial planning indicates that financial planning will be informed by the material financial and investment circumstances of the client, as communicated by the client to the adviser, but may not consider literally all aspects of a client’s financial affairs. Past investment performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597.

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