Quarterly Financial Review: 9 Updates to Make to Your Plan Now (End of Q3 2021)

Quarterly Financial Review: 9 Updates to Make to Your Plan Now (End of Q3 2021)

As you progress toward a lifetime of wealth and security, maintaining a comprehensive financial plan can be critical to your success.

quarterly financial review

The start of the quarter is a good time to review your plans in light of the latest economic data as well as any changes in your own life and goals.

Quarterly reviews are a good financial habit that will help you stay on track for the life you want.

9 Key Updates to Assess Now at the End of Q3 and Start of Q4, 2021

Below is a run down of 9 key data points you should assess in your plan at least every quarter.

Each time you make an update in the NewRetirement Planner, you will immediately see how your out-of-savings age, lifetime debt, cash flow, estate, and tax situation have changed.

1. Your spending, income, and debt

The pandemic has caused interesting shifts in people’s income and spending. This makes it more important than ever to review your cash flow.

Are you on plan? Has your income changed? Paid off a debt? Could you save or spend more now? Make sure your numbers are up to date.

2. Inflation

Inflation continues to be a major headline this quarter. The Fed raised its estimate of average inflation for 2021 to 4.2% up from 3.4% (using the Personal Consumption Expenditures inflation gauge). The more widely known inflation measure, the Consumer Price Index (CPI) paces annual inflation at 5.3%.

The rise may be temporary due to supply chain issues as we emerge from the pandemic, but oil price increases could signal a more permanent jump in prices.

Historic benchmarks:

  • In 2020, the average annual inflation (CPI) was 1.4%.
  • Over the last 20 years, average inflation has been 2.24%.
  • The long-term average (from 1913 to now) for inflation rate is 3.10%.

Run scenarios for general and medical inflation rates. See how your finances weather different inflation forecasts.

3. Housing appreciation

Depending on where you live, homes have seen huge appreciation this year. The S&P/CoreLogic/Case-Shiller National Home Price Index rose 17.7% after correcting for inflation in the year that ended in July.

Historic benchmarks:

  • The 17.7% jump is the highest 12-month increase since 1975 when the analysis began.

If your home value has risen, be sure to update. And, assess your numbers for real estate appreciation.

4. Asset values

The major indices (Nasdaq, S&P 500, and DJIA) showed gains of around 20% for the year up until two weeks ago when we started seeing a fall in prices.

Historic benchmarks:

  • For the previous 10-year time period (2010–2020) the annualized (nominal) return was 13.9%.
  • The highest annual returns in that time period were 29.6% in 2013.
  • The lowest annual returns were -6.24% in 2018.

If you haven’t linked your accounts to update automatically, you will want to make sure your balances are current. And, everyone should update their projected rates of return.

5. Medical cost inflation

Medical costs typically rise faster than the rate of general inflation. However, that trend may not hold true in 2021.

Historic benchmarks:

  • In 2020, medical costs rose 4.41%.
  • The average medical cost inflation rate from 2010–2020 is 3.31%.
  • From 1935 through 2021, the average medical care inflation rate was 4.69% per year, significantly higher than the average general inflation rate over the same time span.

Update your medical cost assumptions.

6. Social Security

The Social Security Cost of Living Adjustment will be announced mid-October. Benefits are expected to bounce up with around a 6% increase, the biggest one-year jump in 40 years.

However, it is important to note that new data puts the future of Social Security and Medicare in financial trouble.

Historic benchmarks:

  • Social Security adjusted 1.3% for 2021.
  • The average annual increase is around 3%.
  • The highest COLA was 14.30% in 1980.

Be sure to adjust your monthly paycheck amount in the Planner.

7. Interest rates

While still historically low, interest rates are inching upward. On Oct. 4, 2021, the average 30-year-fixed-rate mortgage interest rate was 3.18%.

Historic benchmarks:

  • 3 months ago, the average 30-year fixed-rate mortgage interest rate was 2.848%.
  • The highest rate of 18.63% was seen in 1981.
  • The lowest rate was 2.66%, seen in 2021.

Use this information to forecast future real estate transactions, as well as a general economic indicator impacting asset prices, inflation and more.

8. Life expectancy

The average life expectancy in the United States has fallen. However, on this measure it is much more important to assess yourself individually.

Make updates to your expected longevity in My Plan if your health condition has changed.

9. Taxes

Congress is considering a long list of possible tax updates, making it difficult to plan. However, you may want to assess your Roth conversion opportunities using the Roth Conversion Explorer.

After You Have Made Updates, Assess Your Plan Health

After you have made all of your updates, it is a good idea to review the key metrics on the dashboard and in Insights.

If you like what you see, great. If anything is not tracking as you would like, then review suggestions in Coach to better track toward your goals.

Recent Enhancements to the NewRetirement Planner

At NewRetirement, we are committed to providing you with tools and services to achieve a more secure future.

We listen to every suggestion and try hard to prioritize what is most important. Recent improvements have included:

Updated Chance of Success Score and Charting:

We have improved the way we calculate the range of possible outcomes that exist within your plan to make it more accurate. Log in to see if your “Chance of Success” has changed.

New My Plan Organization and Interactions

My Plan has been reorganized and the way you enter and update your informationhas changed.

It is easier to tell where you are, what needs updating, and assess how your projections evolve when you make a change to your data. Best of all, this update makes it easier for the NewRetirement team to deliver new functionality.

Look for much more coming soon. In the mean time, take a look now and make sure your data is up to date:

New Logo

Our new logo reflects our mission to help you create a personalized path to the future you want. NewRetirement is not about one “right” answer. We are all about what is right for you — your values, your resources, and your goals.

Plan with a Coach:

Did you know that PlannerPlus subscribers can meet with a NewRetirement Coach? Walk you through your plan to make sure your data is entered accurately and that you are on the right track. Each session is just $150 — a low, flat fee for the confidence you’ll gain.

Of the new retirement planning content published in Q3 2021, these are the ten posts that resonated the most:

1. 16 Retirement Surprises: What Retirees Wish They Knew About Retirement BEFORE Retiring

Here are 16 possible retirement surprises. For some, it will inspire an early retirement. Others will want to proceed more cautiously. Read more…

2. The Transition to Retirement: 11 Exceptional Tips for the Average Joe or Jane

Boomers were never average. However, here are 11 exceptional tips for the transition to retirement that apply to us all. Read more…

3. Are You Wealthy? 19 Ways to Define Wealth

Are you wealthy? Are you defining wealth correctly? See how people think about wealth and compare your financial well being to others’. Read more…

4. 3 Steps to a Retirement Income Plan: Nobel Winner Helps You Find Best Options for a Secure Future

Nobel prize winner Robert Merton outlines the 3 steps you need to take to create a retirement income plan for a secure future. Read more…

5. NEW Retirement Rules: 15 Guidelines for Financial Security in a Brave New World

Many ideas about retirement are outmoded. Explore these 15 NEW retirement rules for a more secure future. Read more…

6. Retirement Boredom and Other Hardships: 14 Ways to Eliminate the Ennui

Boredom ranks as the biggest retirement problem. Explore this and other common post-work issues. Plus, discover 14 creative ways to overcome the ennui. Read more…

7. What Motivates You to Retire? How Did Others Decide to Take the Leap?

Explore the 7 most often cited motivations for leaping into retirement. Three of them might really surprise you. Read more…

8. Which Countries’ Citizens Enjoy the Best Retirement? (Guess Where the U.S. Ranks?)

Who is in the top 10 and why? What are global threats to retirement security? Can you move to any of the top 10 locales?

Read more…

9. When Can I Retire? 21 Questions to Help You Find the Right Time

There is no one right way to decide when you can retire. Use these questions to figure out when is right for you. Read more…

10. Do You Have the Right Mindset for a Secure and Happy Retirement?

Too many people think that their financial profile is set and can’t be changed. Find out how to develop a planning mindset to strengthen your success.

Read more…

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