Life-Stage Financial Checkups: What to Review Every 5 Years

Performing a disciplined financial review every five years keeps you responsive to changes—marriage, children, career moves, home purchases, business ownership, health shifts, and retirement progress. In my practice reviewing plans for more than 500 clients over 15 years, those who kept a five-year cadence avoided common missteps (outdated beneficiaries, underinsured households, tax surprises) and reached milestones faster.

Below is a focused, practical guide you can use during a five-year checkup. It’s organized so you can complete a thorough review in a few hours or spread it across a couple of meetings with a trusted advisor.

Quick five-year checklist (start here)

  • Update goals: short, medium, long.
  • Compare current spending to goals; update budget.
  • Confirm emergency fund holds 3–12 months of essential expenses.
  • Inventory debts and repayment plans.
  • Review investment allocation, fees, and performance relative to goals.
  • Check retirement accounts, beneficiary designations, and tax rules.
  • Reassess insurance: life, disability, health, home, auto, umbrella.
  • Update estate documents: will, trust, powers of attorney, beneficiaries.
  • Re-evaluate employer benefits and compensation changes.
  • Verify identity protection and credit health.

How to structure the review

  1. Gathering documents (1–2 hours)
  • Recent pay stubs, tax returns (last 2 years), account statements, loan statements, insurance policies, employer benefits summary, and estate documents.
  • Add a list of household members and any anticipated life changes (moves, childcare, career plans).
  1. Goals and timelines (30–60 minutes)
  • Revisit goals set five years ago. Ask: which goals are still relevant? Which are new or finished?
  • Translate goals into dollar targets and priority order (emergency fund, home down payment, college, retirement).
  1. Cash flow and budgeting (30–90 minutes)
  • Run a 90-day cash-flow snapshot. Look for recurring subscriptions, one-off spikes, and variable costs.
  • Use rules like the 50/30/20 or an emergency budget during income fluctuations. See our guide on budgeting for growing families for ideas on adjusting when family needs change: Budgeting for Growing Families: Adjusting as Needs Change.
  1. Debt and credit (30–60 minutes)
  • List principal balances, interest rates, monthly payments, and remaining terms.
  • Prioritize high-interest consumer debt and evaluate refinancing options for mortgages or student loans.
  • Pull a credit report annually and correct errors (CFPB explains how to check and dispute credit report errors: https://www.consumerfinance.gov).
  1. Investments and retirement accounts (45–90 minutes)
  • Check asset allocation against your risk tolerance and time horizon. Rebalance if drifted.
  • Evaluate fees—low-cost index funds often outperform higher-fee alternatives over time.
  • Confirm beneficiary designations on IRAs, 401(k)s, and insurance. These documents override wills; never skip this step.
  • Review tax and withdrawal strategies in light of recent legislation (SECURE 2.0 created changes for retirement accounts — check the latest IRS guidance at https://www.irs.gov for specifics).
  1. Insurance and risk management (30–60 minutes)
  • Recalculate life insurance needs when household size or income changes. Employer coverage may be temporary and insufficient.
  • Check disability insurance (short- and long-term); this is often the most overlooked protection for working households.
  • Confirm health insurance networks and out-of-pocket maxes if employment or location changed.
  • Consider umbrella liability coverage if assets or public exposure increased. For deeper reading on life insurance across ages, see: How Life Insurance Fits Into Your Financial Plan at Every Age.
  1. Taxes and withholding (30–45 minutes)
  • Revisit tax withholding and estimated payments if income, filing status, or number of dependents changed.
  • Use the IRS withholding estimator and review capital-gains exposure if you sold property or investments (IRS: https://www.irs.gov).
  1. Estate planning and beneficiary review (30–60 minutes)
  • Confirm will, durable power of attorney, healthcare proxy, and any trust documents.
  • Update beneficiaries on retirement accounts, life insurance, and transfer-on-death assets.
  1. Employer benefits and compensation (30–45 minutes)
  • Re-check 401(k) match, vesting schedule, stock options, and nonqualified deferred compensation.
  • Update HSA, FSA elections and check tuition assistance or childcare benefits.
  1. Big-picture planning (30–60 minutes)
  • Model retirement progress: projected replacement rate, Social Security expectations, and required savings gap.
  • Reassess major planned purchases (home, second property) and the timing given your balance sheet.

Real-world examples (concise)

  • Career transition: A client shifted to freelance work and paused employer 401(k) contributions. During the five-year checkup, we rebuilt a savings buffer, opened an IRA, and adjusted estimated tax payments to avoid underpayment penalties.

  • Growing family: After a second child, another client increased life and disability coverage, added a 529 plan for education, and reallocated the investment mix to balance near-term needs and long-term retirement growth.

These examples illustrate how a scheduled review prevents reactive, last-minute decisions.

Common mistakes to avoid

  • Assuming employer coverage is permanent. When jobs change, benefits often change — verify and supplement as needed.
  • Forgetting beneficiary updates after marriage, divorce, or death.
  • Letting investment allocation drift without rebalancing. Small drifts compound into larger risk mismatches over time.
  • Ignoring insurance gaps, especially disability insurance — the top cause of household financial hardship for working-age adults (source: insurer data and CFPB guidance).

Professional tips and time-saving tools

  • Set a recurring calendar reminder every five years and another for immediate checks after marriage, childbirth, divorce, job change, inheritance, or major health event.
  • Maintain a single, encrypted file (or password manager note) with account numbers, passwords, and key documents for your executor or trusted contact.
  • Consider semiannual mini-checks for cash flow and budgeting; full five-year reviews for structural items (estate, insurance sizing, strategic tax moves).
  • Use low-cost, reputable account aggregators or your advisor’s portal for quick net worth snapshots.

How a professional can help (and when to seek one)

In my advisory work I find clients gain the most value from an advisor during transitions: buying a home, starting a business, deciding on pension rollovers, or managing a large windfall. A planner can run stress tests, model tax-aware withdrawal strategies, and coordinate estate documents with tax planning. For basic updates (budget, beneficiaries, small rebalances) you can often act on your own using the checklist above.

Frequently asked questions

  • How rigid is the five-year cadence? Treat five years as a baseline. Major life events warrant immediate reviews.
  • Will reviewing every five years cost much? Self-directed reviews may cost only your time. Professional reviews vary; many advisors offer hourly planning sessions or annual retainer models.
  • Can I combine this with annual tax preparation? Yes — use your tax-prep meeting to flag items needing a deeper five-year review (beneficiaries, retirement strategy, estate changes).

Sources and further reading

Professional disclaimer: This article is educational only and not individualized financial advice. For guidance tailored to your personal situation, consult a qualified financial planner, tax advisor, or attorney.