5 big reasons to review your financial plan annually

Creating an effective financial plan takes thought and careful preparation. Once your plan is complete, and the steps towards your goals are set in motion, it’s tempting to check the proverbial box of financial planning off your list and move on. But the truth is that the most impactful financial plans are those that are reviewed at least once a year, and tweaked according to a number of factors. Times change, people change, legislations change. As a result, many of our clients are shocked to learn that even the best laid plans require frequent maintenance to remain effective over the long term.

January presents the perfect time of year to review one’s financial plan. Here are 5 big reasons you don’t want to miss your annual review:

1) Laws change
Financial plans are made in accordance with current laws. As changes to those laws are introduced, previously developed financial plans need to be altered. Take as an example the changes to the Tax on Split Income (TOSI) laws. The Department of Finances’ changes to TOSI made the ability to split income more difficult, excluding many taxpayers who were currently benefitting from the practice.

Age, relationship to the business owner, and involvement in the business are all factors that now add an element of uncertainty to whether a dividend will be subject to TOSI. In our practice alone, we have numerous clients who have had to adjust their plans, some as seriously as having to postpone a planned retirement date due to these legislative changes. To learn more about TOSI, view our presentation on the topic at: https://www.zeifmans.ca/news/zeifmans-tosi-2018-tax-update/

2) Precedents change
Similar to number one on our list, legal precedents can present the need for significant changes to your financial plan. This year, the Milne case[1] threw the issue of multiple wills into the spotlight. In the case, Justice Sean Dunphy ruled that wills cannot leave the distribution of one’s assets to the discretion of one’s trustees. Formerly described as the “basket clause”, individuals who have failed to outline assets specifically in one or both of their wills now need to re-evaluate, or risk the documents being rendered invalid.

3) Finances change
Changes to your income and financial situation can impact your achievement of both long and short-term goals. Reviewing your financial plan annually allows you to check in on your progress. What course adjustments might you need to make in order to reach those goals in the intended time frame? Have you factored in inflation for the long-term goals? The unpredictability of markets and personal financial situations makes it imperative that goals are kept flexible, and reviewed often.

4) Lives change
Getting married or divorced, having children, changing jobs, and losing a parent are all normal life changes that take place over the years. But each of these events can directly impact your financial goals, necessitating tweaks to your financial plan.

5) Objectives change

As we age, our priorities naturally shift. While in your twenties, you may have thought that the ideal retirement would take place on a remote tropical island. But in your forties, you may have a completely different ideal. Going over the details of your financial plan through the lens of your current self can help you to evaluate whether your objectives have changed enough to impact your plan.

How Zeifmans can help
At Zeifmans, we’re so much more than accountants. As a family-run organization, our business is founded on relationships. We seek to understand each client’s personal and professional goals, and to develop financial solutions tailor-made for their achievement. Our depth of knowledge about each individual case, combined with our subject matter expertise in the financial planning sphere enable us to make the right yearly adjustments to ensure that our clients remain on track to achieve their goals, both long and short term.

To schedule your annual review, call us today at 416.256.4000, or email info@zeifmans.ca.

[1] Milne Estate (Re), 2018 ONSC 4174


Q&A with Partner, Jennifer Chasson

Q&A with Partner, Jennifer Chasson

With over 25 years of experience and 100+ successful transactions under her belt, Partner, Jennifer Chasson, brings invaluable expertise to the table. Whether it’s guiding as an advisor, mentor underwriter, ...