A question we are often asked by clients who are first considering their retirement plans is, ‘will my workplace scheme provide enough for my retirement?’. This question is of course specific to each individual. What lifestyle you want at retirement, what assets and savings you have other than your workplace pension, and how much and how long you have been contributing to the scheme are just some of the aspects that will determine if your workplace pension fulfils your retirement goals.

first-time investors

While having a financial plan is a great start, it’s important to remember that to provide its maximum benefit, your plan needs to be continually reviewed and updated to reflect the ongoing changes in your life. That includes everything from marriage and the birth of a child to career changes or a new home purchase, just to name a few.

Keep in mind that financial planning is an ongoing process. That’s why we often refer to a financial plan as a “living document,” something that’s continually amended to reflect the changes in your life. For that reason, it’s a good idea to keep your plan accessible so that you can easily review it as your financial situation changes.

Opportunities for review: the time is now

So when should you review your financial plan? While a lot depends on your circumstances, it’s recommended you review your plan once a year, at a minimum – and maybe more – especially if there have been significant life changes, such as:

  • The birth of a child
  • New job/career change/promotion/ salary increase
  • Job loss
  • Marriage/Divorce/Separation
  • New home purchase
  • Death or inheritance
  • Disability, illness or a change in health status
  • Paying off a major debt
  • Major asset purchase

Annual investment portfolio reviews with your adviser also provide an excellent opportunity to discuss and update your financial goals as they relate to your plan.

The bigger picture

While the list of key life events outlined above is fairly comprehensive, here’s a few more things to consider when reviewing your financial plan:

Goals

Goals are an essential element of any good financial plan. However, you’ll find that your goals will change as you enter different stages in your life. Are all of your goals still relevant to your financial plan? Maybe you can eliminate some goals you’ve achieved (like paying off your student or personal loan) and add new ones (like saving for a home or your child’s education). Reviewing your goals will provide a sense of the progress you’re making and perhaps prompt you to reconsider specific goals or new approaches to achieving them.

Cash flow

It’s a good idea to periodically review your cash flow – particularly when you experience a key life event that may impact your income and/or expenses. It may be necessary for you to make adjustments to your financial plan for the short or long-term to address changes in your cash flow.

Reconsidering risk

Each key life event we experience will inevitably alter our approach to risk. For example, with the birth of a child, having adequate life insurance to protect your family financially may become a priority. Risk is also a key consideration when it comes to investing. As you approach retirement, you’ll probably start reducing your investment risk in order to safeguard your portfolio against market downturns or financial crises.

Five benefits of having a financial plan

  1. Helps you set goals and plan for your future 

Whatever you want to achieve in life, a financial plan will help you set realistic financial goals and outline a strategy and timeline for achieving them.

  1. Identifies opportunities 

Whether it’s growing your savings, reducing debt, or selecting tax-efficient investments to help you keep more of your money, a financial plan can help you get better financial outcomes.

  1. Helps you navigate your finances with confidence 

Working with a financial adviser to create a financial plan will help you build up your wealth through better savings approaches, while increasing your financial knowledge, so that you can be confident in the choices you make.

  1. Plan for the unexpected 

A financial plan can help analyse your current financial situation and put in place appropriate safeguards to handle unexpected life events (e.g., disability or illness, job interruption, loss of life).

  1. Provides peace of mind 

A financial plan doesn’t only give you financial benefits, it can also support your emotional well-being.

Your financial plan review: It all starts with a simple conversation

Whether you need to revise your financial plan or simply want to review certain goals, a GWM adviser will work with you to update your plan to help ensure you’re on track to achieve your financial goals.

PLEASE NOTE: Grosvenor Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority. The value of investment can go down as well as up and you may not get back the original amount you invested. Tax treatment is dependent on individual circumstances and may be subject to change. Tax planning is not regulated by the Financial Conduct Authority.

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