Many people take the time to seek out financial and related advice to help them work toward goals such as retirement, paying for college, travel and more. This advice often takes the form of a plan that looks at a person’s current situation and what is expected or wanted to happen in the future. Such a plan might suggest how much one needs to save to reach a particular goal or goals or might set a roadmap for the timing of various steps, including retirement as well as subsidiary goals.
What is often forgotten in this process is the need for making sure the plan is kept up to date over time. Our assumptions when the plan is first made are based on what we knew then and not what we know now. We may have saved more – or less – than we planned and our investments may have done better – or worse – than we thought. Our goals and their timing may have changed a little – or a lot. You get the idea.
These inevitable changes mean that a static plan cannot keep up and will be misleading over time even in the simplest planning situation. Of course, we do not need to be taking action or feeling concern at each minor adjustment or change in our lives. So when do we need to make sure the plan is updated – how often and upon the occurrence of what events?
Some planners update client plans on a regular basis, perhaps quarterly but generally at least annually. That is a reasonable approach to keeping up, but there are some changes that suggest a near term revisiting of a plan instead of keeping to a set schedule. Such changes include, for example, a person’s marriage or divorce, a birth or death in the family, a disability or serious injury, a new job or retirement, or perhaps moving to a new home or even a new state. In such case, it is likely to be helpful to revisit the plan and see where you stand and what new or changed goals should be addressed.
The central point and concern, though, is always to keep the plan we are following something that is relevant to the person we are planning for, which in turn means up to date.