Financial Planning
The Importance of Having a Plan
A confident retirement. Funding a child or grandchild’s education. Building wealth to pass on to heirs. These are common investment objectives, but just because a goal is common doesn’t mean the approach should be.
Our job as financial advisors is, first, to understand you and your specific circumstances and, second, to use that knowledge to tailor a plan to help you pursue your financial goals. And let’s be clear, a tailored plan goes beyond simply choosing investment products. It entails a deep knowledge and appreciation of your objectives, needs, long-term goals, time horizon, risk tolerance, and – most importantly – your personal values.
Accumulation
The accumulation phase is the first stage of your financial life, marked by saving and investing. You grow from just starting out and collecting your first paycheck to mid-career. You figure out what to do with your paychecks, start understanding the need to save for retirement and invest, manage paying those student loans, and more.
Pre-retirement
The pre-retirement stage begins in the middle of your life. You are now in your 50s or early 60s, managing competing priorities like paying for college for your children while simultaneously increasing your retirement savings. At this point, you are starting to think in more detail about funding your retirement. As you move through this phase and get closer and closer to retirement, you begin to make more concrete plans to determine your needs and manage your healthcare and other costs post-work. Perhaps most importantly, you’ll decide what day you are actually going to retire.
Retirement
This phase marks one of the biggest changes you’ll experience in life, the time when you begin your post-work life and live off your retirement savings and investment income. You’ll see how your plans for income in retirement work in actuality, and you will make sure your retirement plan distributions are done in the most efficient manner. And with all this new time on your hands, you will probably enter a period of adjustment where you learn your post-career identity.
Legacy
In the fourth stage of your financial lifecycle, focus shifts towards passing what you’ve learned and acquired to the next generation. You think about opportunities for lifetime giving to the causes you are passionate about. This is also the time to ensure that you have a wealth transfer plan in place.
"Dont be delinquent in payments to your future."
Cameron K. Reed
Co-founder, Waddell & Reed Inc.