Financial planning, like life, is a dynamic process. Your goals and priorities may shift over the years as your lifestyle or circumstances change and evolve. After creating a comprehensive financial plan, revisit and revise it regularly so that you stay on track.
Jeanette Brox, a Certified Financial Planner® professional with Investors Group in Toronto, shares the answers to some frequently asked questions she receives about the annual financial planning checkup.
How often should I revisit my financial plan?
Once you have a plan in place, commit to re-evaluating it at least once a year. Often this review coincides with tax season or the RRSP contribution deadline, but it can be scheduled for any time that works for you and your planner.
If you’ve undergone a change in your job status or family situation, or any other significant life change, make an appointment to take a look at your plan even if it’s been less than a year.
How important is the check-in?
It’s important. Your plan must be current and accurate in order to provide a road map to your financial and life goals.
Don’t feel that your questions are insignificant, or that your planner is too busy or you’re bothering them. It’s their job to help you, and your check-in is the perfect time to get their undivided attention.
What will an annual checkup typically cover?
Your planner will review your plan to assess whether you’re on track with what you set out to do. You should also make any necessary updates to your personal information and assumptions, such as salary, insurance needs, target retirement age and estate plans, to be sure they’re still accurate.
Your annual checkup is an excellent opportunity time to review your financial and life goals to be sure they still reflect what you want, today and in the future.
Your check-in might also include follow-up activities that you take away, such as working on your will or power of attorney.
How should I prepare to get the most out of our meeting?
Make a list of any questions you’d like to ask your planner.
Think about your goals and make sure they still make sense for your current situation.
Be prepared to update your planner on any life changes or financial actions they may not be aware of.
Bring in any relevant documentation, such as tax returns or pension paperwork.
Remember, a CFP professional can take into account all aspects of your financial life— financial management, investment planning, insurance and risk management, tax planning, retirement planning and estate planning—and provide guidance on how all of these areas affect each other. Keep this holistic approach in mind to be sure you’re addressing all the areas that will help you achieve your financial and life goals.
What about other questions I might have between checkups?
Communication between you and your planner is a two-way street. While once a year is ideal for many people, some wish to check in more often. You may want to establish your preferred frequency of communication when you first set up your plan, as well as the different ways you can get in touch—many CFP professionals are available by phone or email as well as for face-to-face meetings.
Most importantly, don’t put off checking in with your planner, says Jeanette. “Your financial planner wants to see you to ensure that your plan is meeting your needs today and will help you achieve your goals tomorrow,” she says.
“Come to the meeting open-minded and receptive to the process,” Jeanette adds. “Virtually everybody feels much better after they’ve done the review.”
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For more information about the financial planning process, read FAQ: Financial Planning, Choosing a Financial Planner and The Financial Planning Process: What to Expect.