Why use an annual and life-event financial plan review checklist?

Life changes, market moves, and tax-law updates all shift the reality behind your plan. A checklist keeps reviews focused, saves time, and reduces missed steps. In my practice advising more than 500 households over 15 years, I’ve seen clients avoid costly mistakes — missed beneficiary updates, inadequate insurance, and poorly timed retirement withdrawals — simply because they ran a structured review when events occurred.

This article gives a practical checklist, timelines, sample workflows, common pitfalls, and links to tools and resources (including IRS and CFPB guidance) so you can run reviews confidently or prepare to work with a trusted advisor.

The core review checklist — items to check every review

Use this checklist for annual reviews and each time a major life event occurs. Mark items as “No change”, “Needs update”, or “Action needed”.

  • Personal and household details

  • Legal name changes, marital status, number of dependents, address, and employment status.

  • Tax filing status and state residency implications.

  • Income and cash flow

  • Confirm salary, bonus structure, side income, and changes to contractor status.

  • Update cash-flow model and emergency fund size (aim for a buffer that matches job stability).

  • Budget and savings goals

  • Reassess monthly budget categories, discretionary spending, and near-term savings targets.

  • Consider rolling budgets or smoothing seasonal expenses; see FinHelp’s guide on rolling budgets for updating plans monthly for practical templates and methods.

  • Revisit how much “budget slack” you carry for volatility — guidance here can prevent cash-flow shocks.

  • Emergency savings and debt

  • Confirm emergency fund coverage (typically 3–12 months, adjusted for job risk).

  • Reprioritize high-interest debt paydown vs. investing.

  • Investments and asset allocation

  • Verify current asset allocation, target allocation, and rebalancing needs.

  • Reassess risk tolerance after major life events (e.g., new child, health change, job loss).

  • Review tax-efficient placement of assets (taxable vs. tax-advantaged accounts).

  • Retirement planning and income strategy

  • Update retirement savings rates and beneficiary designations on retirement accounts.

  • For those close to retirement, run withdrawal-scenario tests and check Social Security timing (see IRS and SSA guidance for benefits timing and tax treatment).

  • Insurance and risk management

  • Life insurance: confirm coverage amounts, terms, and beneficiaries.

  • Disability insurance: confirm definition of disability, benefit period, and elimination period.

  • Home, auto, umbrella, and health insurance: confirm limits and exclusions after major purchases or changes.

  • Estate planning and legal documents

  • Confirm wills, trusts, power of attorney, and healthcare directives.

  • Update beneficiaries on retirement accounts and life insurance; confirm contingent beneficiaries.

  • Taxes and withholding

  • Recheck withholding (W-4) and estimated tax payments after income changes; consult IRS resources for withholding guidance (IRS.gov).

  • Identify tax-loss harvesting opportunities and changes in itemized deductions vs. standard deduction.

  • Major goals and timelines

  • Confirm milestones (home purchase, child education, retirement) and whether the plan’s savings schedule still achieves those dates.

  • Action items and owner

  • For each “Action needed” entry, assign an owner (you, partner, advisor), a due date, and required documents.

How to run the review: practical workflow and timeline

  1. Schedule and frequency
  • Annual comprehensive review: once a year (same month each year works well). Use it to update every line in the checklist.
  • Life-event review: within 30–90 days of a major change (marriage, birth, home purchase, job change, inheritance, major illness, divorce).
  1. Documents to gather before the meeting
  • Recent pay stubs, 2–3 months of bank and credit-card statements, retirement and brokerage statements, insurance policies, estate documents, last two years’ tax returns.
  1. Run a focused 60–90 minute session
  • First 15 minutes: tally personal changes and immediate risks (insured events, cash shortfalls).
  • Next 30 minutes: analyze cash flow, debt, and short-term savings targets.
  • Final 15–45 minutes: review investments, insurance, beneficiaries, and tax impacts. Create a one-page action plan with next steps.
  1. Follow-up cadence
  • Quarterly check-ins for budgeting and cash-flow adjustments.
  • Rebalance investments either on a calendar schedule or when drift exceeds a set tolerance (e.g., 5 percentage points).

Life-event triggers and specific checklist adjustments

  • Marriage or domestic partnership

  • Update beneficiaries, health insurance coverage, and W-4 withholding. Discuss joint vs. separate accounts and estate plans.

  • Tip from practice: ask couples to complete a short “who does what” checklist for money tasks (bill pay, investments, childcare costs) to avoid overlooked items.

  • New child or dependent

  • Increase life and disability coverage, name guardians in estate documents, start or increase college savings plans (529s or custodial accounts), and update tax credits eligibility.

  • Job change, promotion, or loss

  • Reevaluate emergency fund size. Review stock options or RSU treatment, vesting schedules, and any employer-sponsored retirement plan portability.

  • Home purchase or sale

  • Update homeowners insurance, reassess mortgage strategy (refinance vs. keep), and update estate documents for property ownership changes.

  • Retirement

  • Convert retirement savings into income plans; run withdrawal sequencing and tax-planning scenarios. Consider required minimum distributions timing and tax brackets (current IRS guidance).

  • Divorce or separation

  • Update beneficiaries, reflect property division in budgets, and confirm support payment tax treatment. Reassess credit lines and joint accounts.

  • Inheritance or windfall

  • Pause major decisions to run tax and estate analysis. Consider staged investment of large sums (time diversification) and professional tax advice.

Common mistakes and how to avoid them

  • Waiting too long to update beneficiaries: Review beneficiaries immediately after marriage, birth, divorce, or death.
  • Treating the review as a one-time task: Use annual reviews and event triggers as an ongoing system.
  • Ignoring small changes: Cumulative small changes (pay raise, side gig) alter tax brackets and savings rates over time.
  • Not documenting decisions and owners: Use an action register with due dates and responsible persons.

Quick, printable checklist (one-page)

  • Personal data: name, DOB, marital status, dependents — updated?
  • Income: salary, bonuses, other income — changed?
  • Emergency fund: amount (months) — adequate?
  • Debts: high-interest debt plan — in place?
  • Budget: monthly plan and buffers — updated?
  • Investments: allocation & rebalancing — aligned?
  • Retirement accounts: savings rate & beneficiaries — updated?
  • Insurance: life, disability, home, auto — coverage adequate?
  • Estate documents: will, trust, POA, healthcare directive — current?
  • Taxes: withholding & estimated payments — accurate?
  • Action list: owner, due date, notes

Tools, resources, and authoritative guidance

In my practice: two quick examples

  1. Young family: A couple with a newborn delayed updating beneficiaries and their life insurance by six months; a review would have corrected this immediately. We added a 12-month buffer to their emergency fund after one partner reduced hours.

  2. Pre-retiree: A client nearing retirement had not coordinated IRA rollovers with tax-planning. A review led to a staged Roth-conversion strategy that reduced projected taxes in the first five years of retirement.

Professional disclaimer

This article is educational and not personalized financial advice. Rules, tax treatments, and benefits change; check IRS and CFPB guidance and consult a qualified financial planner, CPA, or attorney for decisions that affect your situation.

If you want, I can convert this checklist into a printable one-page PDF or a fillable worksheet you can use for your next review.