There are three phases people pass through during their wealth journey. The first is The Accumulation Phase, where the focus is on financial growth. Nearing retirement, people's tolerance for riskier, more aggressive investments lowers and they transition into The Preservation Phase. Once someone retires, they pull from their financial assets in The Distribution Phase.
Have you recently retired? Are you planning on retiring in the next year or two? Perhaps you've
been retired for a while?
In any case, you are likely in The Distribution Phase of your wealth journey.
During retirement, your focus shifts from maintaining and protecting your wealth to
actually using it. While keeping your likely lower tolerance for risk in mind, your strategy orients to appropriate ways of creating a solid liveable income from your wealth. Before, your income probably came from one, maybe two, sources. Namely, your employer or your company. When you retire, you likely have several streams of income from various financial vehicles such as social security, retirement accounts, or pension plans. Maneuvering the rules and regulations associated with various streams can be daunting. But, with the appropriate distribution strategy in place, you can get the most out of your hard-earned wealth.
It may feel like it's too late to create a strategy for retirement when you've already retired, but that's not true. You can assess and keep a tab on things like your cash flow's liquidity; what your post-retirement budget looks like; how well you're prepared for unexpected costs; whether your assets
are allocated properly for your situation; how well are you insured; what tax strategies can you
use to reduce your costs of distributing your money; what are the most effective ways to use your Required Minimum Distributions, etc.
Some problems you might face in The Distribution Phase include:
Funds running short because of longevity
Health concerns causing unexpected costs
Volatility and inflation in the market
Rising health care costs
Estate taxes and end-of-life costs
Elizabeth O'Donnell is a financial advisor in Denver, Colorado and cares about creating a financial plan that fits your lifestyle. Initial consultations with her are
complimentary and can
be done by phone or by a Zoom video meeting. This initial consultation is used to learn more about who you are, what your financial situation is, and whether our services are a match for you.
Schedule your complimentary consultation call with