By John P. Napolitano CFP®, CPA, PFS, MST | Founder & Chairman
I was recently asked, “John, what does your ideal annual review look like? What are you looking at for yourself?”
Everyone’s financial situation evolves as life goes on. We go through various stages: accumulation, spending, preservation, and distribution. At this stage of my life, if I were conducting a comprehensive financial review for someone like myself, I’d focus on a few key areas:
Performance Review: How did last year compare to my expectations? Was my spending aligned with what I anticipated? Were my investments performing within an acceptable range? This isn’t about if I beat certain benchmarks. As long as investment performance supports my plan, I’m comfortable.
Family Considerations: What’s happening with my family, and how do my plans affect them? Have there been any negative developments? Or maybe there are more investments I want to make to make in my kids and their families? Do I need to update anything in my estate planning documents (trustees, more grandkids, unique needs, etc.)?
Future Forecast: Are there any large decisions, changes, or investments I need to plan around over the next 2-3 years? For our clients, this could be things as big as exiting a career or selling a business. It could also be things like buying a vacation home, taking a bucket list trip, or planning a significant charitable gift. It’s anything that requires larger, strategic decisions for your balance sheet.
Risk Management: I throw in this one because most people forget that your insurance strategy also needs to evolve as your season of life does. What risks could jeopardize my plans? Did I renew my insurance correctly? Are my deductibles appropriate? Do my various insurance policies work well together to provide comprehensive coverage?
Ultimately, the goal is to identify and address anything that could disrupt an otherwise solid financial plan. We shouldn’t be uncovering anything surprising. We should be adapting your plan to keep right in step with your current situation.