A Financial Plan Is a Living Document: Is Yours Still Breathing?

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A financial plan is not a static document — it's a dynamic road map designed to help you achieve your short-term and long-term goals.

While creating a financial plan is an important first step, its true value lies in how well it adapts to changes in your life, the economy and your objectives.

Here are six reasons why regularly reviewing your financial plan is vital if it is to remain relevant, effective and aligned with your evolving circumstances and goals.

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1. Life changes your financial priorities

Life is full of transitions — marriage, children, career changes, retirement and unexpected events, such as health issues. Each of these can alter your financial priorities.

For example, marriage or a divorce will result in changes to your income, expenses and tax considerations, depending on whether finances are being combined or separated.

If your family grows, your plan will need to be updated to account for education planning and increased household costs. As you approach retirement, your focus will shift from accumulation to income preservation.

It's important to regularly review your financial plan to help ensure it reflects changes in your circumstances so you can prepare for new realities.

About Adviser Intel

The author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

2. Market and economic conditions fluctuate

Financial markets and economic conditions are inherently volatile. Interest rates, inflation and market performance can dramatically affect your investments and purchasing power.

For instance, inflation can erode the value of your savings. If inflation runs around 3% per year and your savings account returns only 1%, the real value of your money declines, meaning you effectively lose about 2% of purchasing power annually.

Market volatility may require you to rebalance your investment portfolios to make sure they continue to align with your asset allocation and risk tolerance. Changes in tax laws can also influence strategies for retirement accounts, estate planning and charitable giving.

Regular reviews allow you to adjust your asset allocation, tax strategies and risk exposure to help you stay on track despite external changes.

3. Your goals evolve

Your goals today may not be the same five years from now. Perhaps you want to retire earlier, start a business or buy a second home.

Reviewing your plan can help you stay aligned with your desired outcomes by prompting key questions: Are your objectives still realistic and relevant? Are you on pace to meet your targets?

If you ask yourself these questions and find that you're falling behind, adjustments should be made proactively. A thorough review can help you stay on track toward your desired outcomes.

4. Unforeseen events can derail plans

Only about 46% of U.S. adults have enough emergency savings to cover three months of expenses, while 24% have no emergency savings at all, according to a Bankrate survey.

Risk factors — such as health issues, job loss and market downturns — can derail even the best-laid plans. Regular reviews can help you prepare for life's ups and downs.

For example, it's a good idea to review your insurance coverage regularly to make sure you have adequate protection for life, health, disability and property.

It's also vital to regularly assess your emergency fund to confirm you have sufficient liquidity for unexpected expenses. The majority of financial advisers recommend having three to six months of income saved in an emergency fund for the unexpected.

By regularly reviewing this fund, you can make sure it remains adequately funded and adjust the amount for life changes, such as when your income increases or decreases.

It's also important to stress-test your portfolio to help evaluate how your investments may perform under adverse conditions. This proactive approach can help minimize the impact of unforeseen events.

5. Tax laws change frequently

Tax laws and personal income situations change. Regular reviews can help identify opportunities to maximize deductions and credits, adjust retirement contributions for tax advantages and implement strategies such as tax-loss harvesting or Roth conversions.

A December 2025 article from Goldman Sachs Asset Management asserted that high-tax-bracket investors who prioritize after-tax returns when allocating assets and selecting products can boost expected wealth by about 15% over 30 years.

Failing to revisit your plan could mean missing out on significant tax savings.

6. Reviews encourage accountability and discipline

Regular reviews create a structured process for monitoring progress and making informed decisions. This reinforces good financial habits, can help prevent emotional reactions to market swings and build confidence in your long-term strategy.

By establishing a consistent review process, you're more likely to stay on track toward your financial goals and avoid impulsive decisions that could derail your plan.

Working with a professional

Going over your reviews with a trusted professional can provide experienced insight and objective advice. Financial advisers can help spot blind spots in your plan, suggest advanced strategies for wealth preservation and growth, and navigate complex issues such as estate planning and business succession.

Regular engagement with a financial professional can help you adapt to changing circumstances and take advantage of opportunities that might otherwise be overlooked.

A good rule of thumb is to review your financial plan at least annually. Quarterly check-ins can be beneficial for those who are approaching retirement or have complex portfolios.

Your financial plan is a living document that should evolve with you. Regular reviews help it remain aligned with your goals, responsive to market conditions, and optimized for tax efficiency and risk management.

By committing to this process, you can help safeguard your financial future and maintain confidence in your ability to achieve what matters most.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Vincent Birardi is based in Halbert Hargrove’s Long Beach headquarters and brings more than 25 years of experience in financial services to his wealth advisory relationships with clients — along with a passion for identifying solutions that will enable them to fulfill their life goals. What he values most about his role is helping to bring clarity and peace of mind to clients and their families. Prior to joining the firm in 2018, Vincent held management roles with PIMCO and Morgan Stanley. He was awarded the ACCREDITED INVESTMENT FIDUCIARY™ designation by the University of Pittsburgh-affiliated Center for Fiduciary Studies and is a CERTIFIED FINANCIAL PLANNER™ professional.