financial plan review
A scheduled periodic reassessment of all components of a financial plan to ensure continued alignment with goals and circumstances.
Example
“The annual financial plan review revealed she needed to increase life insurance after the second child.”
Memory Tip
ANNUAL REVIEW — schedules matter. Life changes and plans must change with it.
Why It Matters
A financial plan review ensures that your strategy remains effective as your life circumstances change, such as job changes, family situations, or market conditions. Regular reviews help you catch potential issues early and adjust your goals or investment allocations before they negatively impact your financial security.
Common Misconception
Many people believe that once they create a financial plan, they can set it and forget it for years without any adjustments. In reality, major life events and changing economic conditions mean that plans typically need review and updates at least annually to remain relevant and effective.
In Practice
A couple might review their financial plan annually in January and discover that their income increased by 15 percent, their home value rose 20 percent, and their investment portfolio grew to 250,000 dollars. During the review, they would adjust their retirement savings contributions upward, rebalance their investment allocations to maintain their target risk level, and update their insurance coverage to reflect their increased assets.
Etymology
Modern financial planning practice — plans require regular maintenance to remain relevant.
Common Misspellings
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Related Terms
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See Also
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