The danger of Set and Forget

I always use the analogy of a freshly landscaped garden when it comes to your own financial plan. Once established and the new plants are watered in, you can’t let it go unattended and expect it to thrive.

It requires weeding, fertilising and monitoring, and your own financial plan is no different. A set and forget strategy is dangerous and can be detrimental to your lifestyle in retirement.

Almost every year we see dramatic changes announced for our superannuation system, interest rates, the stock market and the property market and all of this emphasises the need for regular reviews of your financial strategy and your investment portfolio.

A full review should take place at least 1-2 times per year and cover such topics as:

• ·        What future expenditure is planned for the next 12 months and how much liquidity or access to cash do you have so that you don’t need to sell investments to fund these?
• ·        Have your financial goals, dreams and desires changed as a result of changed business, job or family circumstances?
• ·        Are you on track to achieving your objectives in the planned timeframe or are adjustments needed?
• ·        What new legislation or taxation changes have occurred and can you or are you eligible to take advantage of these and factor them into your financial plan?
• ·        How have your investments performed and are they appropriate for current market conditions or would you benefit from rebalancing or being a bit more proactive with your portfolio?
• ·        Are you adequately protected against changing financial and personal risks?

There is a saying that goes “You don’t know what you don’t know” and this is particularly true when there are constant changes around money, tax, superannuation and retirement.

If you are not keeping up to date then it’s likely that you are not optimising your situation. If you haven’t reviewed your own financial plan then it might be time to ask a professional financial planner to take a look at your strategy and portfolio investments to ensure it’s continuing to meet your changing needs now and into the future.

Olivia Maragna is the co-founder of Aspire Retire Financial Services and has been recently named the Australian Adviser of the Year. Olivia’s advice is general in nature and readers should seek their own professional advice before making any financial decisions. Send your finance questions to Olivia at scoop@brisbanetimes.com.au.

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