By: AnnaMarie Mock, CFP®
As a financial advisor, one of the most important conversations I have with clients is not just about saving for retirement—it's about evolving their strategy over time. Individuals often treat retirement planning as a "set it and forget it" exercise. Your savings strategy should be dynamic, adapting to reflect the inevitable shifts in your life and the broader financial landscape.
How can you recognize when it's time to recalibrate? Let's explore the pivotal moments when reassessment is wise and essential to safeguarding your future.
1. Significant Life Events
Life's milestones—both joyful and challenging—often necessitate a fresh look at your retirement plan. These events may include:
Marriage or Divorce: A change in marital status inevitably impacts your financial responsibilities and goals. Merging finances or untangling them during divorce demands carefully reallocating retirement resources.
Welcoming a Child or Grandchild: The arrival of a new family member may introduce new financial priorities, such as education funding, prompting an adjustment to your long-term savings trajectory.
Career Transitions: Whether you ascend the corporate ladder, change industries, or embark on self-employment, shifts in income and benefits should trigger a strategic review of your retirement contributions.
Health Diagnoses: A serious health condition can accelerate your timeline or require a pivot to a more conservative, income-focused investment approach.
Inheritance or Financial Windfall: An unexpected financial gain opens new possibilities for enhancing retirement readiness but demands thoughtful, disciplined planning.
Each milestone reshapes your financial reality—and your retirement strategy should evolve in lockstep.
2. Changes in Income or Cash Flow
Fluctuations in income—whether an increase or a decline—should prompt immediate attention to your savings rate:
Income Growth: A salary increase offers a prime opportunity to amplify your retirement contributions. Over time, even modest annual increments can yield outsized benefits through the power of compounding.
Income Reduction: Conversely, a reduction in earnings may necessitate a temporary scaling back of contributions. The key is to maintain the habit of saving consistently, even at a lower rate, rather than pausing altogether.
Regularly aligning your savings commitment with your earning capacity helps ensure that your retirement aspirations remain within reach.
3. Market Volatility and Economic Shifts
Economic turbulence can provoke anxiety among investors—but knee-jerk reactions are often detrimental. While maintaining discipline is typically prudent, periods of market volatility also offer a valuable opportunity to revisit your risk tolerance.
Additionally, broader economic changes—such as rising inflation, shifting interest rates, or evolving tax legislation—may create new challenges or opportunities that warrant strategic adjustments.
Periods of volatility are a given—but for those with accumulated wealth, they are also an inflection point for strategic advantage. Rather than reacting emotionally to market turbulence and undermining your long-term growth potential, consider the following:
Reassess risk exposure relative to long-term objectives and time horizons.
Capitalize on lower asset prices through tax-loss harvesting, Roth conversions, or opportunistic rebalancing.
Adjust withdrawal projections and liquidity buffers to reflect new realities.
Shifts in inflation trends, interest rates, or legislative environments (such as changes to retirement contribution limits or tax brackets) merit proactive adjustments to retirement strategies. Remaining attuned to macroeconomic shifts is essential to preserving purchasing power and maximizing wealth longevity.
4. The Approaching Retirement
As retirement draws nearer, your financial focus must shift from wealth accumulation to wealth preservation and income generation.
Key considerations during this phase include:
Maximizing Contributions: Utilizing catch-up provisions (available beginning at age 50) to bolster your savings during your peak earning years.
Planning Withdrawals: Develop a tax-efficient distribution strategy to ensure your assets sustain your desired lifestyle throughout retirement.
Healthcare Preparedness: Accounting for the escalating costs of healthcare, which often become a significant expense in retirement.
The five to ten years before retirement are critical. Thoughtful adjustments during this window can profoundly influence your financial security in retirement.
5. Evolution of Personal Goals
Wealth affords choice—and your vision for your post-career life may evolve. Perhaps earlier global travel ambitions give way to a desire for deeper community engagement, entrepreneurial ventures, or philanthropic legacies.
Your retirement savings plan must not simply support an arbitrary dollar figure; it must underpin the life you now aspire to lead. Periodic reassessment ensures that your strategy aligns with your financial resources and evolving sense of purpose and meaning.
Treat Your Retirement Plan as a Living Document
Retirement planning is not a singular event but a dynamic, lifelong process. Adjusting your strategy in response to life's inevitable changes is not an admission of failure but an act of wisdom and stewardship.
If you're uncertain whether it's time to reassess your approach or simply wish to ensure you remain on track, partnering with a trusted financial advisor can provide the insight and clarity you need.
After all, retirement is not merely an endpoint—it is the gateway to the life you've envisioned. Intentional financial planning today lays the foundation for the freedom and fulfillment you seek tomorrow.
AnnaMarie Mock is a CERTIFIED FINANCIAL PLANNER™ and Partner at HIGHLAND Financial Advisors, LLC, a Fee-Only financial planning firm that offers comprehensive financial planning, retirement planning, employer retirement planning, and investment management. AnnaMarie graduated from Montclair State University with a degree in finance and management and successfully passed the CFP® national exam in 2016. She has been working at Highland Financial Advisors since 2013 as a fee-only, fiduciary Wealth Advisor and is a member of NAPFA.
The foregoing content reflects the opinions of Highland Financial Advisors, LLC, and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions, or forecasts provided herein will prove to be correct.
Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses, which would reduce returns.
Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful or that markets will act as they have in the past.