Financial plans are not static; they must evolve alongside life events, market changes, and legislative updates. From rising inflation to new tax laws, advisors need to stay proactive and ensure their clients’ plans reflect current realities. In this article, we’ll delve into the importance of financial plan updates.
Life Events: Marriage, Divorce, and Retirement
Clients experience significant life events that require immediate updates to financial plans. Whether it’s a marriage, divorce, or the transition into retirement, these milestones have a profound effect on retirement goals, tax obligations, and estate planning needs.
Regularly revisiting plans ensures that these changes are reflected, avoiding potential gaps in coverage or missed financial opportunities. Moreover, this gives advisors and opportunity to create a tailored financial plan in terms – and life events – that your clients understand!
Adapting to Legislative Changes
The tax code is on the cusp of potentially major changes in 2025 and beyond given the political climate and the currently planned sunset of some of the tax changes made in The Tax Cuts and Jobs Act of 2017.
Advisors must remain informed on these legislative updates and how they impact financial planning strategies. For instance, changes in Social Security benefits may require a reevaluation of withdrawal strategies or retirement timelines.
Inflation and Long-Term Projections
Inflation remains a growing concern as it erodes purchasing power over time. Financial plans made without accounting for inflation may leave clients unprepared for future expenses.
Advisors should revisit inflation assumptions, particularly for clients with fixed incomes, and adjust projections to ensure that retirement plans remain sustainable. Carving out static expenses like mortgage expenses may help your clients more accurately forecast the portion of their spending that should stay adjusted for inflation.
Re-Evaluating Risk Tolerance
As clients age or experience market volatility, their risk tolerance may shift. Advisors should regularly assess whether clients’ asset allocations still align with their comfort levels and long-term objectives. Having a strategy for each of your clients to hedge against sequence of returns market risk is critical and that requires keeping it updated regularly.
This is especially important in 2024, given ongoing market fluctuations and economic uncertainty. Here’s how to stress test financial plans in terms your clients will grasp.
We’re Here to Help
With PlanScout, you can easily deliver updated financial plans that reflect the latest tax laws, life changes, and market conditions.
PlanScout’s fast turnaround means your clients’ plans stay current, keeping them on track toward their financial goals.
Warm Regards,
Raygar
Ps. Want to connect? Feel free to book a meeting with me now and follow PlanScout on LinkedIn.
PlanScout: Your Partner for Personalized Financial Planning with a Friendly Touch!
We provide outsourced financial planning services for licensed financial advisors, enabling them to accelerate their growth by delivering visually engaging and comprehensive financial plans within just 3 business days.
/
