Phil Cannella: The Accumuation Phase Vs. Retirement Phase
The first half of your financial journey is the Accumulation Phase, the first half of your financial life. And the second half is the Retirement Phase, wherein the game will be won or lost for you and your family. Will your money last as long as you? Will you keep your current lifestyle in later years of retirement?
Your working years are also known as the accumulation years, in which you need to grow a nest egg for your retired years while still maintaining your family needs. You built a nest egg that would carry you and your spouse throughout the second half of your financial life. The accumulation phase consists of the decades during which you work long and hard, saving, sacrificing and investing to secure your family’s needs and financial future.
The second half of your financial journey, the retirement phase, consists of the drawdown years. These are your harvest years; the years to enjoy the fruits of your labor without the worry of having to lose it or work again. But thinking that you made it (as many do), and can stop planning at the end of the accumulation phase, could then lead to your financial downfall in retirement.
Many American retirees think exactly that at the end of their working careers: “I did it! I made it! I’m done!” On the contrary: this is when the real journey begins.
Phil Cannella: You are at the summit; the planning isn’t over. The climb down the other side of the mountain has just begun!
You need to plan for the retirement phase. This planning will determine whether you have a safe and secure nest egg to take you all the way through those retirement years, whether it’ll last as long as you will, and whether you’ll be able to maintain the lifestyle you’re accustomed to living.
Will an unexpected medical expense or some other catastrophic cost change your retirement plans and affect your family the way my family was affected when my grandfather suffered a stroke? Are you prepared to safely drive on the retirement superhighway and avoid the countless speed bumps, concealed potholes and looming road hazards that could make your life savings collapse in your golden years?
Those are questions every soon-to-be-retiree must ask…and the sooner the better.