If the pandemic has proven anything, it’s that life-altering occasions—both those we experience firsthand and those that merely present themselves as possibilities—have the potential to uproot even the firmest of financial plans. Why? Because reminders of what’s most important to us—wake up calls about how we spend our time and, as an extension, our money—can and should trigger reevaluation of our plans for the future.
And although the exact nature of any pandemic-related changes to a financial plan will look different for everyone, a few common themes have surfaced over the last year and a half that are worth discussing with your advisor:
Risk Tolerance—Has the pandemic changed the way you look at your willingness, need or ability to assume risk in your portfolio? How did you react to last year’s market volatility? Rebalancing your asset allocation can help you adjust back to your plan based on how things have changed.
Ask: Am I comfortable taking market risks anymore?
Saving and Spending—For many, staying at home meant a new perspective on dollars saved and dollars spent. Does your financial plan still reflect your cashflow needs in 2021? Events of the last year may also have underscored the need for an emergency fund in case of an unexpected job loss or health crises.
Ask: Does my budget reflect how I actually spend these days? Am I prepared financially if something unexpected happens?
Travel—Whether you have the itch to change things up after staring at the same four walls for too long or “someday” bucket-list trips took on a new sort of urgency, consider what impact travel investments can have on your overall plan.
Ask: Since tomorrow is never promised, is it finally time to take that dream trip?
Remodeling—Home additions, lifestyle upgrades, finally putting in that pool—there is no doubt that 2020 gave way to a wave of home improvement projects. Doing so can have a material impact on one of your most important assets.
Ask: Is the investment to make my space more comfortable a prudent one?
Relocating—Considering a major move to be closer to family or maybe finally buying that second home in a place that you truly love? Real estate moves come with tax implications that should be on the agenda next time you speak to your advisor.
Ask: Should I move closer to family?
Planning for Retirement—Did the pandemic remind you how much you missed working, or maybe how little your 9-to-5 actually matters to your happiness? If your timeline for retirement has changed, your financial plan will need to, too. Tax changes could also predicate a change in how you’re saving for retirement and warrant a closer look at your situation.
Ask: Am I doing all I can to plan for the retirement I now envision?
Wills and Estate Planning—The pandemic prompted many to consider how prepared they or their loved ones are for end-of-life. As an extension of that, making sure your estate plan is in order became more important than ever.
Ask: Are my affairs in order and do they reflect my most up-to-date wishes?
Whatever realizations may have arisen for you, and whether you think they’re large or small, make sure they are figuring into your financial plan designed and built with the contours of your life in mind.
Ellerbrock-Norris Wealth Strategies is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.