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Retirement Re-education: Back to School Time for Retirement Planning

Retirement Re-education: Back to School Time for Retirement Planning

| August 21, 2023

Retirement planning is a constantly evolving process. Strategies that may have worked fine a few years ago may no longer be the optimal direction to continue. Your life may have taken unexpected turns, you may have different retirement goals you now wish to achieve, or you’ve realized your previous investments may not be working as well as anticipated to help you reach your financial goals.

Now is the time to consider a ‘retirement re-education’ by reviewing your retirement plan and overall strategies to see if they still align with your greater plans and goals.

Evaluating Your Current Plan

When sitting down to review your current retirement plan, you may want to:

  • Check your current investments: Markets have seen significant fluctuations throughout the years, so it is crucial to observe if your investments remain on track to get you toward your retirement goals. Make sure fund percentage balances are still appropriate and that your portfolio is well-diversified and in line with your current situation and future plans.
  • Check for contingencies: Ensure you have protection in place should the unexpected occur. This can start with insurance policies addressing long-term care, disability, and even death. You also want to ensure proper medical coverage to avoid being responsible for major medical expenses.
  • Ensure your retirement plan is tax-efficient: Seeking tax benefits will help you find ways to minimize taxes in your retirement portfolio. This focus can include placing taxable investments into tax-deferred accounts.
  • Evaluate changing family needs: If you have experienced recent adjustments in your family's situation, consider how those changes can affect future finances and if any adjustments need to be made.1

 

Why You May Need to Revise Your Retirement Plan

Giving your retirement plan a once-over every couple of years is generally a good practice, but there may be situations when revising it sooner may be more urgent. Reasons to consider a revamp include:

  • Life event changes: If you have had significant life event changes, such as a new marriage, a divorce, a serious illness, the birth of a child, providing for step-children or grandchildren, or the death of a spouse, you may need to make significant changes to your retirement plan to realign with your new future goals.
  • Lifestyle changes: Moving to a new state, having significant changes in housing and related costs, or considerable health changes all may warrant a change in direction with your retirement goals.
  • Dramatic economic fluctuations: If domestic or global financial conditions have become unpredictable or there have been significant market fluctuations recently, it’s smart to review possible effects on your retirement investments. Economic situations that may prompt an urgent review include rising or falling interest rates, inflation, recessions, and significant Social Security changes.1

 

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risks including possible loss of principal.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05372230

Footnotes

1 5 Ways To Adjust Your Retirement Planning Annually, Forbes, https://www.forbes.com/sites/nextavenue/2020/03/05/5-ways-to-adjust-your-retirement-planning-annually/?sh=4110847f52af