Retirement Strategies: Preservation and Distribution Phases
Kerry Anderson, Anderson Wealth & Retirement
There are a lot of things to consider when planning for retirement, such as how much money you will need to live on and how you’ll generate income
in retirement.
But one of the most important things to think about is how you can make your money last. You don’t want to outlive your money, so it’s very important to have a strategy in place.
When people approach the Preservation Phase (approximately five years before their planned retirement date) they’ve been saving for many years, even decades in most cases. Retirement account balances can be quite large and portfolio volatility can become a major factor. This can significantly impact individuals in the Distribution Phase when they begin taking income from their savings.
When people first start saving for retirement, they're obviously focused on growth ... And they should be. However, the dynamics certainly shift when people get closer and closer to their desired retirement date. Market volatility and managing risk really come into focus and become much more relevant when people have a shorter time horizon.
At the end of the day, it’s all about each person’s individualized retirement needs.
I want to emphasize that the most important thing to accomplish in the initial meeting with a potential client is to focus on and discuss their personal goals. There is no “cookie cutter” plan. Everybody’s situation is unique. After I get to know someone and their personal goals, I take the time to review and analyze their situation and help them position themselves to where they’re not taking any unnecessary risks.
Planning for retirement may seem somewhat daunting, so it’s important to seek assistance and guidance based on your specific situation. Taking steps now to better understand the varying dynamics and phases of retirement can make a significant difference in your financial future.
Kerry Anderson is owner of Anderson Wealth & Retirement in Lincoln, NE and has over 30 years of experience in the financial services industry. If you wish to arrange a meeting or would like to discuss anything pertaining to this article, Mr. Anderson can be contacted at 402-265-5753 or at andersonwealthgroup.com.