How an Annual Financial Review Can Help You Prepare for the Future
A yearly financial checkup can provide a snapshot of your current situation to help you stay on track.
Everyone knows how important it is to get an annual checkup for their physical health, but have you considered doing the same for your financial health?
Between work, family and social obligations, a thorough personal financial checkup may be the last thing on your to-do list. However, it might be worth making the time to sit down with a financial representative to check in on your financial goals at least once a year. Here's what a financial review can look like and some ways you can prepare ahead of time.
What Is an Annual Financial Review?
An annual financial review involves meeting with a financial representative to get a closer, comprehensive look at your finances. This meeting can give you a snapshot of your current financial situation and help you prioritize your financial goals so you can map out a plan for your future.
During this review, you'll likely discuss your short-term, mid-term and long-term financial goals, which might include establishing an emergency fund, getting life insurance and saving for a house, or exploring ways to reach your retirement savings goal.
What Is Discussed During a Financial Review?
The financial representative you meet with will work with you to better understand your current and future financial needs and obligations. For example, planning for retirement might play a significant role in your annual financial review, or if you have children, you might discuss how to save for college and other future education expenses.
You might also discuss your insurance needs. If you currently have life insurance, disability income insurance or long-term care insurance coverage, the financial representative will work with you to assess whether it's enough. If you don't have coverage, you might spend some time discussing whether coverage could help your family.
It's possible that you'll also assess whether you have enough current savings to meet your living expenses should you become disabled, and how disability income insurance may be able to help your family in this situation. As part of that discussion, you might explore whether your current health coverage is sufficient to cover you in the event of a serious illness and how you'd handle any related out-of-pocket costs.
For life insurance, it may be important to consider what kind of coverage will help provide financial protection for your family. It can help to factor in things like housing and health care costs, education, transportation and other daily living expenses as you determine the right amount of coverage for your needs.