Financial Check-up: What to Review Each Year in Retirement
Retirement brings freedom, flexibility, and the chance to enjoy the life you’ve worked so hard to build. But it’s also a time when staying financially aware becomes more important than ever. A simple annual check-up can help ensure your money is working for you; not the other way around.
Just like an annual physical or car tune-up, reviewing your finances each year gives you peace of mind and allows you to adjust your plan as your needs, goals, and life circumstances evolve.
Here’s a checklist of key areas to review every year during retirement:
1. Your Budget and Spending Habits
Start by reviewing your current budget. Are your monthly expenses still in line with your expectations? Have any new costs crept in — such as travel, hobbies, medical expenses, or helping family?
“Each January, I go through my bank and credit card statements,” says Joan, 67, from Arizona. “I look for anything I’ve stopped using — like subscriptions — and decide where I want to spend more, like weekend trips with friends.”
Use this time to rebalance your priorities. Retirement is about enjoying life — so make sure your budget reflects what matters to you now.
2. Withdrawal Strategy and Tax Planning
Most retirees draw income from a mix of sources: pensions, Social Security, savings, and investment accounts. It’s important to make sure your withdrawal strategy still makes sense — and that you’re not taking more (or less) than you need.
“If you’re withdrawing from tax-deferred accounts like IRAs, be aware of Required Minimum Distributions (RMDs),” says financial advisor Carla Monroe. “These start at age 73 for most people and can affect your tax bracket.”
Check in with a tax professional or advisor to see if shifting where your withdrawals come from could help reduce your taxes and stretch your retirement income.
3. Health Insurance and Medical Expenses
Medical needs and costs can change from year to year. During your financial check-in, take a fresh look at your health insurance coverage.
Have your prescriptions changed? Are there better Medicare or supplemental plans available? Open enrollment is the perfect time to make adjustments, but reviewing your expected out-of-pocket expenses early in the year can help you plan ahead.
4. Emergency Fund and Cash Reserves
Even in retirement, having an emergency fund is essential. Experts generally recommend keeping 6 to 12 months of living expenses in a safe, easily accessible account.
If you dipped into your emergency fund last year, make a plan to rebuild it. Life is full of surprises — being prepared helps you face them with confidence.
5. Estate Planning Documents
It’s not always a fun topic, but it’s an important one. Review your will, powers of attorney, medical directives, and beneficiary designations annually.
“After my granddaughter was born, I realized I wanted to update my will to include her,” shares Margaret, 72. “I wouldn’t have remembered if I hadn’t done my yearly check-in.”
Make sure your documents reflect your current wishes and family situation — and store them where someone you trust can find them.
6. Your Goals and Lifestyle
Finally, ask yourself: Does your financial plan still align with your life? Maybe you’re traveling more, moving closer to family, or thinking about downsizing. These choices can affect your finances — and they should be supported by your plan, not hindered by it.
A Fresh Start Every Year
Your retirement years are meant to be rich in experiences and low in stress. A yearly financial review is one of the smartest gifts you can give yourself. It’s not just about numbers — it’s about ensuring your money supports the life you want to live.
So grab a notebook, pour a cup of tea (or wine!), and schedule your annual financial check-in. Future you will be grateful.
