Financial End of Year Review – Major Life Changes

    Published: 06-16-2009
    Views: 4,153
    Financial Advisor Ric Edelman discusses the importance of conducting a year-end personal financial review including how major life changes can affect your finances.

    Ric Edelman: This week I'm showing you how to complete a year-end review of your investments. Let's start by looking at major life changes, marriage, divorce, the birth of a child, death of a spouse, anytime you gain or lose a family member, you need to re-examine your investment portfolio.

    If you're engaged or recently married you need to talk about how and if you'll combine your investments. If you are combining investments, decide how you will adjust your asset allocation so that your different accounts can all work together.

    If you have a new baby, you have new expenses, including the need to save for college. That could impact how you handle your investment strategy. A divorce is another reason to reevaluate your investments; chances are you will lower income and fewer assets after a divorce. And this may cause you to change your retirement plans or other financial goals. And that means your investments need to match your new situation. And if you need to make changes, well, you might have to if your spouse has passed away, you might have gained some insurance money or lost some pension income. No matter what, you need to examine your investments and make necessary changes.