A recent survey shows that of households with $75,000 or more in annual income, only 43% have long-term financial plans in place. If you are one of the 43%, can you sit back and relax while the financial plan unfolds?

Of course, the answer is no. It’s not wise to put your plans on autopilot. But the good news is that achieving your long-term financial goals isn’t a full-time job, but it requires persistent attention. Approximately once a year, you should review your financial plan and see if it continues to reflect the life you want to live, the objectives you wish to meet (including your short-term and long-term financial goals), and the challenges and circumstances in your evolving life.

Ten Things to Consider When Reviewing Your Financial Plan and Setting Financial Goals for 2022

Working with our Stonecrop clients, we’ve seen first-hand the many ways our clients’ goals can be impacted without their realizing it, both annually and long-term, from a variety of sources every year.

1. Does your financial plan reflect your purpose?

Why do you get up in the morning? What are you most passionate about? What are the most important people, causes, things in your life? What do you want to accomplish with this one life you have?

After considering these lofty questions, answer these questions: Is your financial plan congruent with your purpose(s)? Do the financial goals you have identified in your financial plan accurately reflect what you want to accomplish in life? When you picture the life you truly want to live, both now, and in the future (i.e., before and after retirement), does your current financial plan get you there?

2. Are your financial objectives accurate and detailed?

One of the weaknesses in the financial planning industry is that financial goals and objectives are often too general and generic. Often, a financial planner will simply go with the default goals of the target retirement year and having enough money to educate one’s children. But there is so much more. Is retiring by age 65 and getting your children through college all you want to accomplish with your financial resources? Go back to the purposes you identified. Brainstorm potential objectives that you could strive for that would enhance your life, the life you want to live. Do you want to travel to the land of your ancestry, go on a mission trip, pay for your children to have a certain experience, go on a second honeymoon, give to and/or volunteer at a charity, provide for your aging parents’ financial security or long-term care, go back to school, take a sabbatical or have a change of career? Do not short change yourself with the simple, tried and true, default financial goals.

3. Look at last year. Did anything unforeseen happen that will cause a change to your existing goals?

• Were there any deaths, divorces, births, or marriages in the family that now require you to make changes?

• Were you or anyone in your family diagnosed with a health condition that could impact your finances with treatment costs?

• Did you receive any windfalls? What did you do with them?

• Did you or your spouse change jobs or become unemployed?

• What do you do with your old 401k or 403b plan?
• Did you lose access to group life or other group benefits that you need to replace?

4. Do you need to make any changes for tax planning purposes?

Were you surprised by a large liability in April, or perhaps a large refund? Do you need to change your withholding or estimated payments, and if so, will that affect your savings goals?

5. Do you need to make any changes to or replenish your emergency fund?

6. What big purchases/expenses or life transitions will occur this year, and do they impact your long-term objectives?

• Buying a new house or repairing or renovating your current home

• Planning a special trip

• Going back to school

• Buying a car

• Starting a new hobby

• Marriages, new children or grandchildren, or other life events
  

7. Does anyone in your life need financial assistance?

Do you have a parent, child, sibling, or friend who needs financial help, and you are feeling obligated to step in? If so, before committing, you should have it included as an expense in your financial plan so you can see how it affects your financial projections and how it might affect your other objectives.

8. Do you need to review investments?

Is the performance of your investments causing you to lose sleep? Are you keeping your portfolio rebalanced so that it reflects the need for long-term returns to meet all your objectives? Do you understand how and why your portfolio performed as it did last year? You should make sure you have a portfolio that reflects your ability to sleep through the potential volatile markets in the near future as well as your need to arrive at a certain level of overall investment assets by your goal date.

9. Do you want to increase your giving?

As people gain more wealth, and grow older, they often get more generous. Do you have causes, charities, your church or any individuals to whom you would like to extend greater generosity? Make sure you share this with your financial advisor so he or she can collaborate you on this worthy goal and how it affects your other objectives.

10. How is your job?

Do you love your job more than ever? Is your job stressing you out more than ever? Has that changed your retirement timeline? Is it causing you to consider a career change, or at least a job change?

Answering these questions and doing something about them, if necessary, can be daunting. But working with your financial advisor helps remove the burden of any indecision, confusion or fear you may experience so that your annual and long-term plans work together for you. In fact, a recent survey shows that 83% of people who set their financial plans feel better about their finances one year later.

Stonecrop Wealth Advisors Can Help With All Aspects of Your Financial Planning

Stonecrop Wealth Advisors is a full-service financial and investment advisory firm that works with both families and non-profit institutions. We are passionate about protecting and enabling your hopes and dreams, including the ones you have for family and for the causes that are important to you.

Talk to us today about setting, or re-setting, your financial goals and incorporating this year’s plans into a complete, long-term game plan. Just connect with us here, and we’ll be in touch.

We look forward to talking soon. In the meantime, please check out our weekly eNewsletter, MacGray Matter, from our president, Douglas MacGray. Sign up here.