How often should I review and adjust my retirement savings strategy?

Reviewing and adjusting your retirement savings strategy is essential to ensure that it remains aligned with your financial goals, risk tolerance, and changing life circumstances. The frequency of these reviews can vary based on factors such as your age, investment strategy, and financial situation. Here are some general guidelines for how often you should review and adjust your retirement savings strategy:

1. Annually:

• Portfolio Rebalancing: It's a good practice to rebalance your investment portfolio at least once a year. Rebalancing involves selling assets that have exceeded their target allocation and buying those that have fallen below their target. This helps maintain your desired asset allocation and risk level.

• Performance Evaluation: Review the performance of your retirement accounts annually. Assess whether your investments are meeting your expected returns and compare your portfolio's performance to relevant benchmarks.

• Contributions: If you have the opportunity to make additional contributions to your retirement accounts, such as IRAs or workplace plans, consider doing so on an annual basis. Contributing regularly can help you maximize your savings potential.

2. Major Life Events:

• Whenever life events occur: Significant life changes, such as marriage, divorce, the birth of a child, the purchase of a home, or a job change, can impact your financial situation and retirement goals. Whenever such events occur, review your retirement strategy and make necessary adjustments to accommodate these changes.

3. Tax Planning:

• Tax season: Take advantage of tax planning opportunities related to retirement accounts, such as making annual contributions to IRAs or adjusting your contributions to employer-sponsored plans, during the tax season.

4. Milestone Birthdays:

• Age milestones: Certain ages trigger important retirement planning decisions. For example, at age 50, you become eligible for catch-up contributions to retirement accounts, which can boost your savings. At age 59½, you can start making penalty-free withdrawals from IRAs. At age 62, you become eligible for Social Security benefits (though delaying may result in higher benefits).

5. Market Volatility:

• During significant market events: Major market fluctuations or economic events may necessitate a review of your investment strategy. It's essential to stay calm during market turbulence and avoid making impulsive decisions, but it can be a good time to assess your risk tolerance and consider adjustments if needed.

6. Retirement Countdown:

• As retirement approaches: As you get closer to your retirement date, you may want to review your strategy more frequently, perhaps quarterly or semi-annually. This is the time to fine-tune your asset allocation, confirm your retirement income sources, and ensure that your portfolio aligns with your retirement goals.

7. Regular Check-Ins:

• Regularly scheduled check-ins: Consider setting aside time for regular financial check-ins throughout the year. These check-ins can include reviewing your budget, monitoring your savings progress, and making sure you're on track to meet your retirement goals.

Remember that the frequency of your reviews should match your individual circumstances and preferences. While it's essential to monitor your retirement savings regularly, avoid making constant changes to your strategy in response to short-term market fluctuations. Focus on the long-term and consult with a financial advisor when making significant adjustments to your retirement plan. Additionally, life circumstances and goals can change, so it's crucial to remain flexible and adapt your strategy accordingly.