1. Relationship changes
Any time you change your marital status, your financial plan should change accordingly. Not only should you update your accounts (such as updating beneficiaries) and your will and/or estate plan, it’s also a good time to revisit your retirement savings.
For example, if you’ve just been through a divorce, you most likely had to divide up the retirement savings with your ex-spouse. As a newly single person, you’ll want to adjust how much you’re saving—ideally, you’d try to save an even higher percentage. But if finances are tight as you adjust, you may have to reduce the amount you’re saving.
Similarly, if you are newly married and combining resources, it’s the perfect time to increase your 401(k) contributions (instead of merely increasing your spending). Research shows that among dual-income couples where only one of the people is contributing to a 401(k), the contributor often fails to increase the amount they’re putting in, which means they’re not really making up for the fact that their partner isn’t contributing.1
If you’re welcoming a new baby, you may want to think about opening a 529 plan or Coverdell Education Savings Account. Both are tax-advantaged savings plans that allow parents to save for future education costs for a child. (The birth of a child is also a time to think about updating beneficiaries and/or your will.)