We like to compare the accumulation and distribution phases of retirement to climbing Mount Everest and explaining what it means in regard to planning your financial future.
The accumulation phase for retirement is the building and saving of your money in anticipation of retirement. Everyone climbs up the mountain differently, and therefore, everyone’s plan of saving is also going to be different. But understanding this phase can better prepare you to avoid financial challenges during retirement.
We’ll help you by first researching that mountain and figuring out the best way to climb to the top. The same goes for retirement planning. The plan should be created before you reach retirement so when you are in retirement, you’ll be able to live comfortably, will be prepared for any setbacks or unexpected expenses and even a possible illness. Meeting with an advisor to help you put that plan in place can provide the knowledge and guidance you need and help you to continue feeling confident when encountering potential retirement road blocks. We touch base with our clients regularly and review their financial plan, make any necessary adjustments, and then they return to their climb.
Once you reach retirement – the top of your Mount Everest – it’s definitely something to celebrate, but what about your way down? Are you accounting for possible risks, which will be different than the risks from the ascent up the mountain? What is your approach to this next stage, and what are wise distributions to withdraw from your retirement accounts? Are you going to be prepared for the way down just as you are on the way up?
When we meet with you to help you plan your descent, we’ll first discuss the best way to maximize your Social Security benefits. It’s necessary to do this in combination with your entire financial portfolio. We’ll also make recommendations for taking the most tax-efficient distributions from your qualified accounts, i.e., IRAs and 401(k)s.
Other considerations on the way down are long-term care and whether you should include an umbrella protection over your finances in case something happens. And after all of this is addressed, what if something happens to you? Will your loved ones be taken care of financially? It’s essential to designate every single asset you have for a purpose in retirement.
We’ll ask personal and financial questions as we help you develop your financial plan, but only to understand your situation and help prepare for your journey. We want you to fully understand and feel confident about how it will all come together. Life keeps us busy, but an integral part in any financial strategy is to prepare for the unknown.