Life Events That Should Trigger a Financial Plan Review

Most financial plans are created once and revisited occasionally — usually at an annual review meeting where the conversation stays fairly routine. But there are moments in life when a financial plan needs more than a routine check-in. These are the events that change the underlying assumptions your plan was built on.

Miss these windows and you can spend years operating on a plan that no longer reflects your life. Act on them promptly and you protect yourself, optimize your tax situation, and make better decisions with clear information.

1. Marriage or Common-Law Partnership

Combining finances with a partner changes almost everything: income splitting opportunities, beneficiary designations, insurance needs, estate planning, and retirement projections. In Alberta, common-law status carries significant legal and financial implications after a certain period of cohabitation — even without a formal marriage.

A financial review at this stage should address: updating beneficiary designations on RRSPs, TFSAs, and insurance policies; spousal RRSP contributions if there is an income disparity; reviewing life and disability insurance coverage for both partners; and updating wills and powers of attorney.

2. Divorce or Separation

Divorce is one of the most financially disruptive events a person can experience. Property division, pension valuation, support obligations, and the sudden shift from a dual-income to single-income plan require a complete financial reassessment.

In Alberta, pension assets accumulated during a marriage are divisible. If your spouse has a defined benefit pension — or you do — proper valuation and division is critical and legally complex. RRSP assets are split using a spousal rollover that must be done correctly to avoid tax triggers.

Post-separation, your insurance coverage, beneficiary designations, will, and power of attorney almost certainly need to be updated immediately. These details are often overlooked in the emotional intensity of a separation — and the oversight can be costly.

3. Having Children

Children change both your financial obligations and your financial priorities. The financial plan needs to address: life insurance to replace your income if you die or become disabled; disability insurance if it was not already adequate; RESP contributions to capture the Canada Education Savings Grant (CESG); and updated estate documents naming a guardian for minor children.

For Alberta professionals, the child care expense deduction and the possibility of income splitting through a family trust (in corporate structures) are also worth reviewing with your advisor.

4. Significant Income Change — Up or Down

A major raise, a new job, a promotion to partnership, or a business that starts generating serious profit — these are all triggers for a tax and planning review. Higher income changes your RRSP contribution room, your marginal tax rate, your ability to income split, and your retirement projections.

A job loss or significant income reduction is equally important to address. It may change your CPP contribution history, your retirement timeline, your ability to service debt, and your investment risk tolerance. Acting quickly — rather than waiting to "see how things go" — gives you more options.

5. Inheritance or Large Windfall

Receiving an inheritance, a large bonus, proceeds from a business sale, or a legal settlement creates a one-time planning opportunity that is easy to waste. Without a clear plan, windfalls are often absorbed into lifestyle spending without meaningfully improving your long-term financial position.

A financial review in this situation addresses: how to deploy the funds most tax-efficiently, whether to pay down debt or invest, whether the windfall creates OAS clawback risk in retirement, and whether TFSA or RRSP room should be used immediately.

6. Approaching Retirement (5–10 Years Out)

The decade before retirement is perhaps the most important planning window of your financial life. Decisions made in this period — CPP timing, RRSP drawdown strategy, pension options, asset allocation — have consequences that last 20–30 years.

A retirement readiness review at this stage should be comprehensive. It is not a routine annual meeting — it is a fundamental reassessment of your entire financial plan with the finish line now in sight.

7. Health Diagnosis — Yours or a Spouse’s

A serious health diagnosis changes multiple planning assumptions: life expectancy, retirement spending, insurance needs, and the timing of government benefit elections. A diagnosis may also qualify you or a family member for the Disability Tax Credit, which can provide significant tax savings retroactively and going forward.

This is also a time to ensure your power of attorney and personal directive documents are current — before they are urgently needed.

8. Death of a Spouse or Partner

The death of a spouse triggers a cascade of financial decisions that must be made while grieving — often under time pressure. RRSP rollovers to the surviving spouse, pension survivor benefits, estate settlement, and the complete revision of the surviving partner’s retirement plan all need to be addressed.

Having a trusted financial planner who already knows your combined financial picture is invaluable in this moment. It removes the burden of explaining everything from scratch at the worst possible time.

9. Business Sale or Major Asset Disposition

Selling a business, selling investment property, or disposing of other major assets typically creates a large taxable event. The Lifetime Capital Gains Exemption (LCGE) for qualifying small business shares can shelter a significant portion of a business sale — but only if the structure is right and the planning is done in advance.

Post-sale, you may suddenly have more liquidity than you have managed before. How you invest, structure, and draw from those proceeds is a planning question that deserves careful attention.

10. Major Tax Law Changes

Federal or provincial tax law changes — new capital gains inclusion rates, changes to the TFSA limit, modifications to CPP, corporate tax changes — can affect your existing plan. Not every tax change requires a major review, but significant ones affecting your situation are worth addressing proactively rather than reactively.