Assessing the Progress of Your Retirement Plan

The first step in the review process is to determine whether your retirement plans are on track to meet your goals. This involves several key assessments:

Financial Performance Review: Compare your current investment balances against the projections made in the initial planning stages. Have your investments performed as expected? Are you saving enough in your retirement accounts?

Goal Alignment Check: Reassess your retirement goals. Have your desired retirement age or lifestyle expectations changed? It’s important to ensure that your plan still reflects your current and future aspirations.

Risk Exposure Evaluation: As you approach retirement, your risk tolerance may decrease. Review the risk level of your current investments to ensure it’s appropriate for your age and proximity to retirement.

Reviewing Objectives

Once you’ve assessed whether your plan is on track, the next step is to review your objectives. Life changes, such as marriage, the birth of grandchildren, health issues, or changes in employment status, can all impact your retirement planning. Updating your objectives to reflect these changes is crucial. Consider:

Income Needs: Estimate any changes in expected retirement income needs based on updated life circumstances and goals.

Savings Targets: Adjust your savings targets if necessary to accommodate revised income needs or changes in expected retirement age.

Establishing Contingencies

What Contingencies Do You Need to Put in Place?

No plan is foolproof, and unexpected events can derail even the most well-thought-out retirement strategies. Establishing contingencies is crucial for ensuring financial security, regardless of what life throws your way.

Healthcare Considerations: One of the most significant unforeseen costs in retirement can arise from healthcare needs. Consider setting aside additional savings specifically for potential healthcare expenses.

Market Volatility: Establish strategies to mitigate the impact of market downturns, such as diversifying investment portfolios or setting up emergency funds that are accessible without significant penalties.

Estate Planning: Ensure that your estate planning is up to date, including wills, Lasting Powers of Attorney, and beneficiary designations. This planning helps manage how your assets will be distributed and can provide additional peace of mind for you and your loved ones.

Tax Implications: Regularly review potential tax liabilities associated with withdrawal strategies and consult your advisor to optimise your tax situation in retirement.

Regularly reviewing your retirement plan is essential to adapt to changes in your personal circumstances and the external environment. By assessing whether your plan is on track, revisiting your objectives, and setting up appropriate contingencies, you can ensure that your retirement is as comfortable and secure as possible. Stay proactive and consult with financial professionals to help guide you through the process, making necessary adjustments to keep your retirement plans resilient.