How to weather the four seasons of financial planning

How to weather the four seasons of financial planning
Depending on where you live, the change of seasons may bring you joy or anxiety.
Regardless, they seem to come and go quickly. Have you ever heard of the four seasons of
financial planning? It’s important to understand what they are and why you shouldn’t let them
whiz by you without living each to its fullest.
Understanding the four “financial seasons” of life can help define where you are today and the
steps you need to take tomorrow. Knowing how to handle your money from season to season
can help you meet your long-term financial goals. Here are some tips to guide you.
Accumulation season. This is a time to work hard to save, invest and grow your nest egg.
Usually you’re anywhere between the ages of 20 and 55. This typically is the longest financial
season and what you do here essentially sets you up for the rest of your life. Set your financial
objectives and spend time accumulating wealth to lay your financial foundation. Remember to
leverage your employer-sponsored retirement plan, open a brokerage account and do all you
can to save, grow and keep your hard-earned savings for the seasons to follow.
Preservation season. During this time, it’s key to protect the money you’ve worked hard to
accumulate so you can count on it in retirement. To successfully preserve your assets during
this season, you should begin assessing your risk tolerance. Typically, people who fall within
the ages of 55-65 need to become more conservative with their investment dollars. Seek safe
alternatives that still provide a satisfactory rate of return.
Distribution season. Sufficient income planning is the most important consideration of this
season as you determine how to make the most of your financial savings. If you’re over the
age of 65, it’s important to consider your tax liabilities in retirement and the order in which you
make withdrawals from various retirement saving accounts. Many people are fortunate to have
a 20- to 30-year retirement, so your life savings will need to be structured to provide you a
reliable income stream to last the duration of your retirement years.
Succession season. What do you want to happen to the remainder of your life savings after
your passing? Without proper planning, it can go to taxes and fees rather than your intended
heirs. Your legacy depends on how well you planned your finances in each of the previous
Isn’t it better to have a good plan today than a perfect one tomorrow? That’s why you should
talk to an investment professional at Community Bank to help you weather each season and
together, work toward a happy retirement.
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