Annual Financial Planning Checklist

One of the keys to gaining financial security is to set goals and continually evaluate your progress. Without working toward anything specific, you’re likely to spend more than you should without realizing it, leaving you vulnerable to life’s unexpected moments. Financial planning doesn’t have to be difficult. Follow this checklist and keep track of your goals as you work toward a brighter financial future.

For more guidance, consider consulting a financial advisor to review your overall financial plan and evaluate strategies that align with your goals, timeline and risk tolerance.

Annual Planning Checklist

An annual financial plan is a way to re-evaluate your financial goals. While you may have already made a complete financial plan in the past, financial experts recommend annual check-ins to evaluate how your situation has changed over the preceding year. You’ll take your long-term financial goals into consideration and check off your progress. Here are the key areas to review.

1. Take a Personal Inventory of Your Finances

An annual personal inventory gives you a snapshot of your financial status, which makes it easy for you to compare your progress from any given year. If you have an inventory from last year, update it for this year, and you can easily compare across categories. If this is your first time creating one, here’s how to get started:

Make a list of your assets: That includes your income, savings balances, retirement account values and any real estate equity.
List your debts: This is where you add up your mortgage, your car loan, your student loans and credit card balances.
List your credit utilization ratio: This is the amount of debt you carry versus your total credit limit, and it lets you know exactly how much you rely on credit to get by.

Evaluate the shape of your finances by comparing your financial snapshot with your financial plan. If your goal is to pay off your debt, have you made any progress? If you wanted to save more for retirement, did you add to your assets column?

2. Evaluate Major Life Changes

As part of your annual financial checkup, you’ll need to consider how your life has changed over the past year and how you think it may be in the next. Do you anticipate any big changes? Are you considering changing jobs? Will you be getting married? Moving?

If you have a family, have you already started thinking about saving for your college education? If you have elderly parents, have you considered long-term care insurance in case one or both become incapacitated and need assistance? Evaluating these life changes may result in a shifting of your financial goals.

3. Adjust Your Savings Plan for Retirement

Saving for retirement requires its own section since it’s both a larger and longer-term goal than others. Whether or not you’ve already begun saving for retirement, you should evaluate what tax treatment is best for you as time passes.

Depending on your marginal tax rate, is a traditional or Roth retirement account appropriate for you?
Is now a good time to convert your traditional IRA to a Roth IRA?
If you have leftover 401(k) funds from a past employer, now is a good time to roll over those funds into your current 401(k) or a corresponding IRA.
Review the annual contribution limits and evaluate whether you’ve maximized your contributions for the year.

4. Evaluate Your Investment Portfolio

In addition to checking your retirement accounts, you’ll also need to conduct your annual investment portfolio check. Financial experts recommend reviewing your portfolio asset allocation at least once a year, buying and selling assets to realign your portfolio with your desired allocation profile. If your financial situation and goals have changed, now is also the time to rebalance your portfolio and ensure your investments follow your desired diversification strategy.

Your portfolio allocation should reflect your time horizon and risk tolerance. Common allocation examples include:

Aggressive: 80% stocks / 20% bonds
Moderate: 60% stocks / 40% bonds
Conservative: 40% stocks / 60% bonds

If market gains have shifted your allocation significantly, rebalancing can help maintain your intended risk level. Also review expense ratios, tax efficiency and whether assets are properly located across taxable and tax-advantaged accounts.

5. Review Your Insurance Coverage

Since you’re reviewing your finances, don’t forget to assess your insurance coverage. Homeowner’s or renter’s insurance should be reevaluated yearly to make sure your coverage limits are sufficient to cover potential losses.

Confirm that you’re covered in case of an accident or disability, as these types of major changes can also heavily affect your future financial picture. Consider changing your health insurance or contributing to a health savings account so that you can rest assured that you’ll be able to cover medical costs if necessary.

6. Review Your Tax Strategy

Tax planning is an often-overlooked part of financial planning. An annual review can help identify opportunities to improve efficiency.

Consider asking:

Has your marginal tax bracket changed?
Would a Roth conversion make sense this year?
Can you harvest capital losses to offset gains?
Have you contributed to a Health Savings Account (HSA), if eligible?
Are you using tax-advantaged accounts before investing in taxable accounts?
If you’re charitably inclined, would a donor-advised fund or qualified charitable distribution (QCD) help reduce taxes?

Even small adjustments can compound over time.

7. Update Your Estate Plan and Associated Documents

Lastly, you’ll need to evaluate if you’ve prepared an estate plan in case of your passing. If you have, make sure it’s updated to reflect your intentions and consider signing a durable power of attorney as part of your estate plans.

One of the most overlooked estate planning steps is updating beneficiary designations. Certain assets, including retirement accounts, life insurance policies and payable-on-death accounts, are distributed directly to the named beneficiaries.

If you haven’t, consider speaking with an expert to plan how to transition your estate. It may be beneficial to transfer some to your heirs ahead of time, both to ensure your intentions are properly realized and to benefit from certain tax strategies.

Frequently Asked Questions

How often should you review your financial plan?

Most people benefit from reviewing their financial plan at least once per year. However, major life events such as marriage, divorce, a new job, the birth of a child or a significant change in income may warrant an immediate review. An annual check-in helps ensure your plan reflects your current goals and circumstances.

What should be included in a financial planning checklist?

A comprehensive checklist typically includes reviewing your net worth, debt levels, retirement contributions, investment allocation, insurance coverage, tax strategy and estate documents. It should also account for changes in your personal life that may affect your financial priorities.

Why is rebalancing your portfolio important?

Over time, market gains and losses can shift your asset allocation away from your intended target. Rebalancing restores your portfolio to its original risk profile, helping maintain consistency with your long-term goals and time horizon.

How do life changes affect financial planning?

Major events such as changing jobs, starting a family, relocating or caring for aging parents can significantly alter your income needs, tax situation and insurance requirements. Reviewing your plan after these changes can help keep your financial strategy aligned with your current reality.

Bottom Line

Reviewing your financial plan annually is a valuable tool for ensuring you meet your goals. You’ll be able to measure how much progress you’re making, which can help keep you moving forward. A financial plan can give you peace of mind about your finances in the future so don’t wait. Go through your financial planning checklist today.

Tips for Building Wealth

Not sure what investments and strategies will help you meet your long-term goals? That’s where a financial advisor can potentially help. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Building wealth starts with disciplined saving. Setting aside a fixed percentage of your income and gradually increasing that amount as your earnings grow can create steady momentum. Automating contributions to retirement or brokerage accounts can help remove the temptation to spend.