Where are you today?
Start saving for retirement (Accumulation Phase)
Younger investors are typically focused on accumulation — building up wealth through earning and investing. Typical priorities include saving for a home purchase and preparing for
a child’s education. With a long road ahead of them, young adults can often afford to take on a higher level of risk in the pursuit of higher potential return.
Refining your retirement strategy (Consolidation Phase)
You’ve started, but now in mid-life consolidation becomes more important. Income from work and investments is often peaking, and expenses such as mortgages are declining. Disposable income and net worth may rise sharply as home equity and retirement plan assets increase. Yet because retirement may still be 10 or more years away, investing for the future remains a major priority, and proper planning is imperative.
Getting ready for retirement (Red Zone Phase)
These are the critical years before you retire. You can start by plotting out exactly which options, resources and strategies you’ll need to take advantage of in the near future. Just some of the questions that will need to be answered will be: “When exactly will I retire?, Which accounts will I use and when?, How much will I need to withdraw? Where will it come from?”
Having a plan for living in retirement (Income Phase)
You’ve worked for what now seems like forever, but are you ready to make that transition? As investors start to retire, they enter an income phase and will look to their investments to help fund their retirement. Investors near the age of retirement typically seek to reduce their investment risk even if that means lower expected returns.
After retirement (Estate Planning or Gifting Phase)
After retirement, there also may be a significant period of gifting, marked by contributions to schools, charities and relatives. Retirees who feel they are financially secure and have plenty of discretionary time may increase spending as they indulge personal passions such as travel and fine living.