Capstone Connections

The Importance of a Financial Wellness Check

Key Points:

  • Once a financial plan is created, it is crucial to periodically review and reassess the plan to ensure that it is still in line with current and future financial goals.
  • Major life changes (new job, relocation, change in marital status) or other factors (market fluctuations, changes in inflation, etc.) may prompt necessary revisions to one’s financial plan. 
  • We recommend working with a CERTIFIED FINANCIAL PLANNER™ professional to not only help you navigate and develop a plan, but to also periodically reevaluate the plan as your life evolves. You will want to ensure your plan is in line with your current and future financial goals.

We know how important it can be to see a doctor for an annual check-up. A proactive visit can help identify and treat warning signs before they turn into major issues. This notion holds true for your financial health as well. While having any financial plan in place is important, it is essential that that plan is also updated periodically.

At Capstone, we strive to regularly review clients’ financial plans to account for a number of variables, including market performance and life circumstances. Below are some questions to think about when considering whether you may need to update your plan.

Is my portfolio too risky now that I am closer to retirement? While having a portfolio heavily weighted towards stocks to target higher returns might have been appropriate to build wealth when you were younger, it may no longer be suitable as you near retirement. A thirty-year-old could invest in stocks, expect to hold them for decades, and weather market fluctuations. A retiree, on the other hand, would likely want to preserve their accumulated wealth. It may be more suitable for them to invest more of their portfolio in bonds, which are typically less volatile than stocks.

Are my goals for retirement the same as they were 10 years ago? If your quiet retirement plans suddenly include  visiting all seven continents, large expenses such as this should be factored into retirement projections. Making necessary updates to the expense side of retirement projections can help identify shortfall risk, or the risk of running out of money sooner than originally expected.

Is my spending/saving on target with what I anticipated? Perhaps you saved a certain amount every month as expected, but market returns weren’t as strong as originally assumed.  It may be a good idea to increase monthly savings now, to make sure the desired spending level during retirement is still feasible. Higher than anticipated spending related to health issues might also require updates to a financial plan.

Am I withholding enough to cover my tax liability? Maybe you received a significant salary increase or a larger than expected bonus, and you aren’t sure how it will affect your tax position. To ensure you aren’t hit with a surprise balance due when filing your return, you could have a tax projection prepared to determine whether you need to increase withholding or make quarterly estimated tax payments. Taking these steps early may help avoid a tax penalty or offset a tax liability at filing time.

I am spending more than I earn. What can I do? Unless you spend time tracking monthly expenses, it is all too easy to fall into a budget deficit. A surprising amount of money can be spent on “small” items such as going out for coffee or lunch. Reevaluating your plan can help to uncover these issues.

Am I saving enough to keep up with increasing education costs? According to, tuition tends to increase about 8% per year. Increasing education costs is important to consider when calculating how much money you would need to save for future college expenses. Reviewing your savings rate along with the total anticipated cost of school is integral to executing a sufficient college savings plan.

Am I sufficiently covered from a personal liability standpoint? In today’s litigious legal landscape, having a personal umbrella policy can provide excess liability coverage beyond your existing home or auto coverage. Updating your financial plan and balance sheet can help you determine if you need this extra coverage and how much you need.

Do I have enough life insurance? Maybe it’s a child on the way, a recent marriage or a home purchase; whatever it is, life changes quickly. Updating your financial plan to reflect those changes is important, especially when trying to provide and cover for an untimely death. Life insurance can also be used for various estate planning considerations as your wealth grows to certain levels.

Am I keeping up with current estate legislation? From year to year, legislation that’s applicable to federal and state estate taxes can change dramatically. In fact, the federal estate tax exemption was significantly increased with the passage of the Tax Cuts and Jobs Act in 2017, effective in 2018 until 2025. (Please read our initial analysis of the tax cuts.) Performing an annual review of your estate plan can help address whether your estate is minimizing potential estate taxes or if modifications are needed to your documents.

Are your current wishes for your estate still reflected in your documents? Often times a change in family dynamics creates a need to update estate documents. For example, ten years ago you named your brother as the executor of your estate; later, however, you both have a falling out. Reviewing your estate plan can help uncover this potential issue for resolution.

At Capstone, we take a comprehensive approach to financial planning. The above questions are just a few of the ways to be thinking about your own financial plan and updates that may be needed. Once a plan is created, we believe it is critical to periodically reevaluate the plan as your life evolves to ensure it’s in line with your financial goals.

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