How Healthy is your Financial Plan?

In these times of various uncertainties, we are all aware of what to watch for regarding our physical well-being. However, are we also recognizing the signs that it may be time to have a financial plan check-up?

Much like visits to your medical professionals to maintain feeling your best physically, your financial planning responsibilities are not a one-and-done process. It is important to periodically review your current situation with a plan check-up to determine if any interventions are necessary to keep you financially healthy.

While the pandemic limitations and market fluctuations may cause you to feel some angst in the short-term, your financial success in the bigger picture is more dependent upon how you react to changes in your personal circumstances. Paying attention to the following “symptoms” call allow you to control any needed adjustments to your strategy or confirm that you are still on track.

1. Changes to Your Goals

First and foremost, consider if you have changed any of your overall goals and objectives. Your individual financial plan is normally established as a result of you living the lifestyle you desire and accomplishing the actions needed to get you to that point of financial security. With the increased time at home during the pandemic, many of our lifestyle objectives may have changed.  For example, maybe now you want to invest in a second home for family get-togethers or vacations (or for you to escape to after all the family togetherness!).

2. Changes to Cash Flow

Secondly, alterations to your cash flow with unexpected variances to income or expenses should indicate that it’s time to review your financial plan. This year has shown us how quickly our day-to-day routines can pivot when necessary and how fluid the world might be going forward. Modifications with working remotely, business operations limitations, home schooling, travel restrictions and more could mean changes in income and expenses – possibly both positive and negative depending upon your personal situation. Some individuals have indicated that with fewer discretionary spending opportunities, they are happy to build up their nest egg for their future; while others have embraced the increased stay-at-home online options, and their spending has remained the same.

3. Rate of Return

Another important piece in reviewing your plan is what rate of return was factored into the cash flow assumptions. Your actual investment returns and earned interest will most likely be different than that of the initial assumption, as you may have accumulated more or less assets and not spent exactly as illustrated, causing a ripple effect on the end result. If you don’t perform periodic monitoring to see how you are tracking to your plan numbers, it may be a good time to review and reassess.

4. Life-altering Events

The final category that may indicate a need to re-evaluate your financial planning revolves around life events that alter your situation. These can be business, age or health related, caused by family dynamics or governmental law requirements and include occurrences such as:

  • marriage, divorce
  • birth/loss of dependents
  • disability/medical conditions
  • career change, retirement
  • purchase or sale of business
  • sale/purchase of residence, relocation, change in state of residency
  • you or dependents approaching milestone ages of 18, 21, 26, 55, 65,72
  • casualty loss
  • Social Security, Medicare changes
  • changes in your charitable intent
  • tax code amendments
  • revised estate planning goals/beneficiary relationships
  • long-term care needs

Your financial plan is your prescription for the strategic path to financial health for you and your family. Stay positive, test negative! For more information, please contact a Sikich Financial representative.

Investment advisory services offered through Sikich Financial, an SEC registered investment advisor.

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This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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