Conduct an annual financial planning review
Review your retirement accounts and asset allocation on an annual basis to help you stay on track to your financial goals.
Financial planning is a comprehensive, ongoing approach to managing all areas of your financial life.
As you plan for retirement, your focus is most likely on saving. But once you retire, your focus typically shifts from saving to generating income from your savings, planning for health care costs and making savings last.
Here's why an annual financial review with an Ameriprise financial advisor is a critical touchpoint throughout these stages, and what you should be looking for at these regular meetings.
In this article:
How an annual review can benefit you
An annual financial planning review gives you a chance to evaluate your financial position. Many changes can affect your investments during the course of a year. It's important to monitor your retirement and investment accounts regularly and make annual adjustments to stay on track.
- Your asset allocation could be off balance. Over time, different assets may grow at different paces. For example, what started as a 50/50 allocation between stocks and bonds may now be 45/55.
- You may be less diversified than you think. If the value of one of your assets grows substantially, it may make up a large portion of your portfolio, potentially reducing your level of diversification and increasing your risk.
- Your needs have changed. Even if your portfolio has remained the same, your situation may have changed. Your income may have increased or decreased, your retirement plans may have changed, or your portfolio may need modification.
- You are subject to new rules. Changes in tax laws could affect your portfolio for better or worse. For example, capital gains rates or holding periods could rise or fall, or retirement plan contribution rules could shift.
Your annual financial review checklist: What to look for
- Reduced tolerance for risk. If you've recently retired, you may need a new strategy to help maximize your retirement income. Your risk tolerance may change at this time, which would affect your asset allocation.
- Income changes. You may have started to receive Social Security payments or required minimum distributions (RMDs) from retirement accounts. If so, you may need to make adjustments to the accounts that are currently providing income.
- Investment outcomes. Results that are significantly different than expected can reduce the effectiveness of your plan. Recognizing these changes gives you the opportunity to make necessary adjustments.
- Changes in your personal or family situation. You may have recently lost a spouse or domestic partner, welcomed new grandchildren into your life or moved to a different state, all of which can impact your financial plan.
You're eligible to make catch-up contributions to IRAs, 401(k)s and other retirement plans.
Note: Does not apply to IRAs.
Note: 457(b) plans have no penalty.
You're eligible for collecting partial Social Security retirement benefits; also eligible for a reverse mortgage.
You're eligible for full Social Security benefits according to your birthday or you may wait up to age 70 to qualify for delayed retirement benefits.
Generally, you must begin taking required minimum distributions (RMDs) from IRAs, 401(k)s and other retirement plans when you reach a certain age. Your exact RMD age will depend on the year you are born: The RMD age is 73 for individuals who turn 72 after 2022. In 2033, the RMD age is set to increase to 75.1
An Ameriprise financial advisor will work with you to conduct an annual financial review and help make necessary adjustments to help you meet your goals in retirement.
Or, request an appointment online to speak with an advisor.
At Ameriprise, the financial advice we give each of our clients is personalized, based on your goals and no one else's.
If you know someone who could benefit from a conversation, please refer me.
Background and qualification information is available at FINRA's BrokerCheck website.