Once a foundation has been put into place, but several years (at least) before retirement commences, it usually makes sense to take a step back and take a look at the state of your financial plan. How are your assets positioned? What has changed since the time you put those building blocks into place? Are there any new goals that need to be accounted for? The time before retirement is an important stage to reflect on where you stand, and reposition yourself for the impending life change.
In the Financial Foundation stage, we talked about the many changes occurring during the early phase of your life and career. Things aren’t so different in the Pre-Retirement stage either! In the financial sense, there are specific actions to consider before retiring. How best can we take advantage of the Social Security benefits that have accrued during your career? How are 401(k) and other pre-tax accounts positioned, and what will be the best strategies to allow those to grow, while also planning to start withdrawing money from those accounts and paying taxes on the funds?
It’s popular to refer to this this as a Conservation stage, which makes sense given the direction and needs of your portfolio, but there’s certainly more to it than that. There is also the mental and emotional side of retirement that needs to be addressed. For many clients, finding a new purpose when their career is gone can be a difficult adjustment. For our clients who are married, we like to make sure that both partners are on the same page regarding goals and expectations for retirement. If one spouse desires travel, while the other is more focused on providing funds for grandchildren, it’s important to have those conversations during the Pre-Retirement stage, so that we can establish a shared set of goals, and a plan for achieving them.

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