How to evaluate if your financial plan is keeping pace with your wealth

1: Net worth growth and savings rate

These are basic measurements, but they remain valuable, if incomplete, indicators of progress. They also tend to slip easily, particularly your savings rate. The general advice is that 20% of your income should go into savings, but as your finances get more complicated, that can shift. If much of your net worth is growing outside of income and you’re still contributing the same amount, that can be a trigger for a closer look. A large change in your overall net worth can similarly be a trigger to dig deeper into your plan and rebalance it.

2: Liquidity: how much of your wealth can you actually reach?

High net worth does not always translate into financial flexibility. A substantial portion of your wealth may be held in a home, private business, investment property, retirement account, trust, or concentrated stock position. These assets may carry significant value, but converting them into cash can be difficult and time consuming. Each year, you should review how much readily accessible capital you have, and make sure that aligns with your planned spending. You should also consider contributing to a bucket for emergency costs, and perhaps even opening an opportunity fund. If your current liquid or easily accessible capital doesn’t meet your needs for the next few years, it’s likely time to make some adjustments.

3: Tax efficiency in your investments and retirement portfolio

Saving for retirement is important for everyone, but as those savings grow, what you keep after taxes may matter more than the headline number. An annual review can look at your tax diversification, how investments are distributed among taxable, tax-deferred, and potentially tax-free accounts. It can also uncover if particular investments are held in appropriate account types, how gains and losses are being managed, and whether charitable giving or future withdrawals are coordinated with the broader tax strategy. You should also make a plan for future RMDs well before retirement to make sure you’re not hit with large tax bills later.

4: Your retirement portfolio risk aligns with age and goals

Particularly with larger portfolios, your risk profile can shift dramatically from year to year as assets and investments grow. What may have started as an 80/20 split between stocks and bonds can quickly change. Review whether your portfolio still reflects your time horizon and goals and whether market performance has pushed it away from its intended allocation. Of course, these are just retirement savings rules of thumb. Discuss your risk profile with your financial professional.

Pay particular attention to concentration risk. A large position in company stock, a successful business, one sector, or a particular type of real estate may have helped create wealth while also leaving too much of it dependent on a single outcome.

5: Asset protection and umbrella insurance for high net worth

As wealth grows, so can the financial consequences of liability, property loss, disability, or an interruption in income. The goal is to not insure every possible loss. It is to identify the losses that could materially affect your wealth, family, or long-term plans. Depending on your circumstances, an annual coverage review may include:

• Life insurance for estate/legacy planning and end-of-life costs
• Disability insurance in case you can’t earn an income for an extended period of time
• Mortgage protection through decreasing-term life insurance to pay off a home
• Long-term care insurance to cover health expenses outside the scope of health insurance and Medicare
• Umbrella liability insurance to cover the gaps that your other protection doesn’t

6: Your estate plan is up to date

At least annually, confirm that beneficiary designations, wills, trusts, powers of attorney, healthcare directives, insurance policies, and account ownership arrangements are properly updated and held in a single place. Make sure your executor knows their role and understands your wishes and that everything is clearly spelled out. A healthy plan should provide both direction for your assets and clarity for the people who will eventually carry it forward. If you haven’t already explored them, trusts can be an invaluable tool in making sure your wishes are followed.
 

Red flags your financial plan may not be keeping up

Some gaps in your plan are easier to spot than others. The following warning signs do not necessarily mean your plan has failed, but they should prompt a closer look at whether it still supports your needs and goals.

Growing assets but weak cash flow—e.g., house-rich, cash-poor

Your net worth may be rising while much of your wealth remains tied up. If meeting expenses or responding to opportunities regularly requires borrowing or selling investments, your plan may need a better balance between long-term growth and accessible cash.

Unexpected tax bills

An occasional surprise can happen, especially after an unusually complex year. But recurring or increasingly large tax bills may signal that investment decisions, income sources, distributions, and charitable giving are not being planned thoroughly enough.

Unsafe withdrawal rates in retirement

If your withdrawals consistently outpace what your portfolio can reasonably support, you may be placing future income or legacy goals at risk. A closer review can help determine whether lowering your spending or changing your investment portfolio can help you mitigate these risks.

Your estate plan hasn’t been updated in years

An older estate plan may no longer reflect your assets, family relationships, or beneficiaries. Even if your wishes have not changed, outdated documents or ownership arrangements can create uncertainty and should be reviewed with a qualified estate-planning attorney.

Your financial professionals aren’t coordinating

Lastly, families with a higher net worth often rely on several professionals, including a financial advisor, tax professional, estate-planning attorney, and insurance professional. If each person is working independently, one decision can create unintended consequences elsewhere, like an investment move that increases taxes or an ownership change that conflicts with the estate plan.

Every family should have a qualified financial professional who has a full picture of not only your finances, but also your goals and that they coordinate with your other tax and legal professionals. That way, your investment, tax, insurance, and estate-planning decisions all remain aligned supporting your strategy.

Frequently asked questions (FAQs) about financial plan reviews