Are you looking forward to a comfortable retirement? Then hopefully you have planned to retire on more than just your Social Security benefits and a 401K. Nowadays, it would be almost impossible to have adequate income depending only on government benefits. So, a comprehensive retirement plan is a must. But, creating that plan and putting into place is only the first step. After the plan is created, it is still crucial that you periodically revise your plan, so your changing needs are still being met. You may be wondering: when should I update my retirement plan?
When should I review my retirement plan?
There is really no right or wrong answer to this question. One way to be sure your retirement plan is periodically reviewed, is to plan to do so once a year. It is as simple as checking to be sure your needs or wants have not changed drastically, requiring any revisions to your plan. Now, if you experience a major life event, you should always revisit your plan at that time. For example, if you have any significant change in your financial status, whether good or bad, your retirement plan may need to be updated. Substantial purchases of assets, such as real estate, may require revisions to your retirement plan, as well.
Changes in beneficiaries require revisions to your retirement plan
Whenever your beneficiaries change, you need to update your retirement plan. If you get married, divorced, or have more children, you will likely need to make changes to your designated beneficiaries. Whenever an insurance policy, IRA or 401k is established, you are required to designate beneficiaries of the proceeds, upon your death. If one of those designated beneficiaries dies, or if there are new heirs that need to be included, you should make appropriate changes to your beneficiary designations for these accounts.
Retirement planning is accomplished in stages
Realistically, the easiest way to create your retirement plan is to do so in stages. Your initial retirement planning is not usually very detailed. When you are in your mid-thirties, for instance, you should start considering when you want to retire. That way, you can begin to estimate how much money you are likely to need to live comfortably, once you retire. Start early, so you can determine whether your goals are realistic.
After another ten years or so, once you have a better idea of your overall financial situation, you can decide whether you want to settle down somewhere new or travel around the world. Your goals are more well-defined and you can better predict how much money you will need when you retire.
The final stage of investment planning, typically occurring when you are in your fifties, involves examining the investments you have in place and determining whether they need to be transferred to safer, more stable investment products. At this final stage, the goal is to let your investments grow.
If you have questions regarding revisions, or any other retirement planning needs, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.