Income, savings, spending, taxes and long-term goals can be impacted by major life changes. One phrase that may be used is financial planning during transition or TruNorth Advisors. A transition in life does not have to imply financial hardship, but it may involve a shift in focus. An assessment of one's affairs may be required following a change in marital status, divorce, birth of a child, career change, retirement, or windfall. For instance, if you get a new job, your pay, benefits, retirement savings and cash flow will all be different. Likewise, retirement may cause the focus to look at income planning instead of saving and earning. 

This article examines some typical situations that may cause individuals to consider their financial strategies. It also details what information you can have prior to approaching a professional financial counselor.

Why Life Changes Can Affect Financial Plans

A New Situation Can Change Old Goals

A financial plan reflects your income, expenses, assets, debts, and future goals. When one part changes, other parts can require review as well.

Investor.gov recommends considering major events such as marriage, divorce, children, home purchases, and caregiving when reviewing retirement plans.

For example, a person who changes jobs could face different retirement benefits. A household adding a child could have new education and insurance needs.

The first step does not need to involve a major financial decision. Instead, make a clear list of what changed and which goals now matter most.

Marriage and Family Changes

Combining Two Financial Lives

Marriage can bring two income sources, separate accounts, existing debts, insurance plans, and different spending habits into one household.

A review from the professionals like TruNorth Advisors can help each person understand:

• Current income and monthly costs.

• Savings and investment accounts.

• Outstanding loans and credit balances.

• Insurance coverage.

• Retirement contributions.

• Short- and long-term goals.

Open discussion can also help reduce confusion. Each person should know which accounts exist and which obligations require regular payments.

Family growth creates another reason to review a plan. Childcare, education savings, insurance, and changes in work can affect household cash flow.

Divorce, Separation, and Loss of a Partner

Reviewing Finances After a Major Family Change

Household incomes and expenditure can shift rapidly due to separation. Other factors, such as accounts, property, debts, insurance and retirement plans may need to be reviewed. 

The first step in gathering such information is to get the financial records for a person in such a transition. These can range from bank statements, investments, loans, tax records, insurance, and property information.

A change of life may come back as the death of a spouse. A surviving partner may suddenly have access to financial accounts that were formerly in the hands of another. 

One example of a name that can come up in financial planning conversations is Matt Dixon. But it's important to note that the person's financial situation and goals are the main concern. 

Talk to a professional to get an explanation of the various planning options. But there are legal and tax issues which may necessitate different qualified experts.

Career Changes and Retirement

When Income or Work Status Changes

New jobs can affect wages, retirement plans, benefits, taxes, and savings. Self-employment vs full-time employment is another set of financial questions.

Retirement brings a different shift. Regular employment income can stop or reduce, while expenses continue.

Before making changes, review:

• Expected income sources.

• Regular living costs.

• Retirement account balances.

• Debt obligations.

• Insurance needs.

• Emergency savings.

• Planned large expenses.

Investor.gov also recommends defining financial goals and matching saving or investing choices with the time available to meet them.

A clear list can make discussions with a financial professional more focused.

Receiving an Inheritance or Large Payment

Handling a Sudden Change in Assets

An inheritance, settlement, bonus, or other large payment can alter a person's financial position. A sudden increase in available funds does not automatically mean every dollar should be invested.

First, identify taxes, debts, immediate needs, and planned expenses. Then consider how the money fits into existing goals.

Taking time to understand the situation can reduce rushed decisions.

When Should You Review Your Financial Plan?

Look at the Whole Situation

A review can make sense whenever a major event changes income, family needs, assets, debt, or future plans.

TruNorth Advisors can be one search term people use when exploring financial planning during such transitions. Still, the right questions depend on individual circumstances.

Before a meeting, prepare recent statements and a short list of goals. Include questions about savings, retirement, cash needs, taxes, insurance, and risk.

FAQs

Does every life change require a new financial plan?
Not necessarily. Smaller changes might only require an update to an existing plan.

Can retirement planning change after a career move?
Yes. A new employer, income level, retirement plan, or work schedule can affect existing retirement goals.

Final Words

Life changes can alter financial priorities, but not all aspects of a financial plan. A review can be triggered by the following events: Marriage, family growth, separation, career change, retirement, and large payments. For individuals who are looking into financial planning during these times, TruNorth Advisors is applicable but should be discussed in the context of an individual's goals. Begin by straightening the record and determine what has changed. Any financial discussion that follows will be more useful if there is a clear starting point.