Give your retirement planning an annual assessment

The year 2015 has been an unpredictable one and tested the nerves of the most resilient of investors. You can take it as a good way to measure your investing habits and assess your nature based on the decisions you made. If you found yourself selling some of the stock investment plans based on reports of volatility in the stock market in the media, then you might start off your annual review by reassessing your risk tolerance.

When we say risk tolerance, we are talking about your ability to remain undeterred despite all the fluctuations going on in the market, while keeping your long term goals in focus. An assessment of your risk tolerance considers, among other factors, your investment time horizon, your accumulation goal, and the assets you may have outside of your plan account.

Also, if there are any major life changes you have come across recently, then even now is a good time to review your retirement plan. Major life changes may include you getting married, or getting a divorce, buying or selling a house, having a baby, sending your child to college, you or your spouse changing your job, receiving a promotion, or leaving the workforce altogether, somebody in the family experiencing a change in their health, or maybe you inherited a sum of money that has had a material impact on your net worth, etc. Any of these cases can affect your current and future financial situation.

After you have assessed your risk tolerance and made a note of any major life changes, you may want to take a look into the future from a fresh perspective. If your dreams about life after retirement have changed, and if those changes will affect the amount of money you will need, then you may have to change your retirement plans accordingly.