US Expat resources

The importance of regularly reviewing your financial plan

By Todd Cowan | 02 Aug, 2022

Are you on track to retire comfortably? What are your financial goals? How much income will you need to generate each month when you have retired? These are all questions that you should be asking yourself on a regular basis.

Our regular reviews are designed to measure progress toward your goals, making adjustments as life’s journey unfolds. The key point here is to plan in advance, and as Ben Franklin said, “If you fail to plan, you are planning to fail!”

With that, we have shared 7 considerations for your next planning discussion; while by no means this is an exhaustive list, the following is offered as ‘food for thought’ when sitting down with your advisor:

01 Set clear goals

Too many people simply guess what they will need in retirement, and many don’t have a written plan to reach what goals they have set. Others simply don’t have any goals. If you don’t have goals, you’re more likely to experience financial drift, away from the issues most important to you.

02 A comprehensive and holistic financial plan is a must

While regular savings is important, a roadmap that takes you to your goals is critical. For a great introduction to planning, see my colleague Joshua Moss’s Roadmap series, offering steps to consider along the way.

With the improvements to communications, business, travel, and remote working we have experienced over the last few years, the world is now becoming smaller. This means you need to make sure your plan works from both a multicurrency and multi-jurisdictional basis to support your life’s journey.

03 Never stop saving / Cash flow planning

After paying for housing, food, and other expenses, are you able to consistently save money? A recent survey suggests that one in five Americans aren’t saving anything, and only one in six save over 15% of their income.

We aren’t saying that a spartan existence that eliminates frills, fun, and entertainment is the path to take. Instead, examine your expenditures closely.

We have the ability to run multi-currency and multi-wrapper cash flows, which can give you a clearer insight to where you are with your goals.

04 Retirement savings is a key component

If you want to stay on track for retirement, the importance of regular contributions to a pension or retirement fund is critical.

At a minimum, individuals in a company sponsored retirement or pension plan should consider contributing the minimum amount necessary to receive the employer’s full matching contribution (subject to a retirement plan’s T&Cs).

05 Did you get a new job?

Congratulations. As you look at benefits, how quickly can you start contributing to your company’s retirement or pension plan?

Plus, don’t forget about your prior pension plan. Roll it into an IRA / SIPP or into your new plan. Unless there is an extraordinary circumstance, do not squander your retirement assets. Generally, you should be withdrawing from your pension as the last option.

06 Understand your debt situation

And the reason for each part.

Is your debt productive?  For example, a mortgage allows you to purchase a home and build equity instead of renting; and could best be understood as ‘working debt’. This productive, working debt can also be utilized to avoid short term liquidity needs, alleviating the need to liquidate a portion of your portfolio to pay for property, or a large tax bill.

In other cases, debt can be oppressive with debilitatingly high interest. We recommend speaking to your advisor, we can offer you guidance that helps reduce and eliminate burdensome liabilities.

07 Check in with US Social Security / UK State Pension

Both the US Social Security and UK state websites have a considerable arsenal of resources. It is a good idea to check in online and make sure there has been an accurate accounting of your historical annual income. If your income is understated, your benefits will be shortchanged.

While the above list is a good primer for consideration, the US Family Office team endeavors to be your first ‘port of call’ for all things cross border wealth management, as such we are here to help you establish, discuss, and quantify the financial goals and considerations specific to your personal situation.

To get in contact with London & Capital, please give us a call on +44 (0) 207 396 3388 or click here.

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