Financial Plan Review Checklist: Annual and Life-Event Triggers

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.

  • Rolling Budgets: Why and How to Update Your Plan Monthly — https://finhelp.io/glossary/rolling-budgets-why-and-how-to-update-your-plan-monthly/

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

  • Budget Slack: How Much Buffer to Build into Monthly Plans — https://finhelp.io/glossary/budget-slack-how-much-buffer-to-build-into-monthly-plans/

• 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

• IRS: for withholding, retirement taxation, and RMD rules — https://www.irs.gov
• Consumer Financial Protection Bureau (CFPB): for consumer protection and insurance basics — https://www.consumerfinance.gov
• FinHelp practical guides: rolling budgets, slack buffers, and budgeting for couples:
• Rolling Budgets — https://finhelp.io/glossary/rolling-budgets-why-and-how-to-update-your-plan-monthly/
• Budget Slack — https://finhelp.io/glossary/budget-slack-how-much-buffer-to-build-into-monthly-plans/
• Budgeting for Couples — https://finhelp.io/glossary/budgeting-for-couples-aligning-priorities-and-accounts/

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.