Why it’s “super important” to review your financial plan for 2022

This month of January does not only mark the beginning of a new year.

It is also the second anniversary of the first identified case of Covid-19 in the United States.

At the time, the pandemic took most people by surprise. Now many of our lives don’t look like they did before Covid-19.

People are now reassessing their retirement timelines, where and how they live and other future goals in the face of the new omicron variant of Covid-19 and the continuing unknowns.

Learn more about Advisor Insight:

Here’s a look at other stories impacting the financial advisor industry.

“It’s probably the longest period I’ve seen in 30 years… [of] how many people are in a period of self-reflection,” said Ted Jenkin, CEO and founder of Oxygen Financial in Atlanta.

For 2022, it’s “super important” for everyone to redo their financial plan, Jenkin said.

“It’s just such a good time to re-evaluate your goals and reflect on your life priorities and ask yourself, ‘Are you ready to make it happen? ‘” Jenkin said.

Uncertainties heading into the new year prompted clients to put plans on hold, said Winnie Sun, managing director of Sun Group Wealth Partners in Irvine, Calif. Her message: “Control the things you can control,” she said.

Rethink your retirement calendar

Olivier Rossi | Stone | Getty Images

The Covid-19 pandemic has inspired many people to reassess their relationships with work and careers.

The question many are asking, advisers say, is, “Can I retire early?”

People who wanted to retire at 65 now want to know if they can retire at 60, Jenkin said. And those who planned to stop working at 60 now want to see if they can move that up to 55.

“I think people are like, ‘I can have millions and millions of dollars in the bank, but it’s no use to me if I don’t have my health and I’m not using it to do things. what I want to do,'” Jenkin said.

Sun said she had a client who retired at a very young age – much earlier than her colleagues – and others may too.

“I tell my clients that if you want to get rid of 10 years of early retirement, that means we really have to hurry now and find other ways to generate income,” she said.

By choosing a side hustle or self-employment and living off the bare minimum, you can successfully accelerate your retirement timeline, Sun said. It’s also essential that you invest for the long-term growth you’ll need.

“If you don’t want to make that sacrifice, you’ll have to work more years,” Sun said.

“There really is no magic formula,” she added. “It’s really just a plus and a minus.”

Build big goals into your plan

After spending so much time at home, many people are also considering major renovations or moving completely.

Before launching that new home improvement project or taking equity stakes, assess what it will actually cost and how you will pay for it, Sun said.

Keep in mind that one big project could affect your ability to achieve other goals, such as funding retirement or saving for education.

For example, if you are expanding your house, it may mean that you will have to work another year or two before retiring. Ask yourself if you’re ready to make that sacrifice, Sun advised.

“You really have to rank what’s most important to you,” Sun said. “But also look at the long term, as well as the short term.”

Also, be sure to meet with a financial adviser to discuss your decision and make sure you’re on the right track, she said.

Fund future joys

Klaus Vedfelt | Digital Vision | Getty Images

As new uncertainties related to Covid-19 loom, you may find yourself giving up on things you used to do, like traveling or attending large-scale events like concerts.

The upside is that it can be a great time to save money, Sun said.

Take the money you don’t spend and set it aside in savings accounts or investment funds named for specific future goals like “vacation fund”, “future entertainment” or “new home”.

“You still have this exciting goal, but you give yourself a chance to grow, so that sacrifice becomes more important for later,” Sun said.

By funding Future Joys, Sun said it has helped his clients think positively as they see their money grow. “It gives them hope for the future,” she said.