Forum

Retirement Planning may be looked at as having distinct phases; the Accumulation Phase and the Distribution Phase. Let's take a look at both.

The Accumulation Phase is the time frame between starting your working career and your ultimate retirement. This is the time if you set cash aside for future use. This cash, when mixed with Social Security and a company retirement plan (if any), will provide the earnings after you stop working. We will debate the "best" way to accumulate retirement dollars till the cows come residence and by no means reach a conclusion. Asking the questions about should I put money into mutual funds or the market, or should I give attention to guarantees with CDs, money markets, annuities or permanent life insurance can and must be answered with a powerful YES! After all, the alternative shouldn't be accumulating anything at all. Each savings or investment product has loads of merit and every has ample drawback. There isn't any one proper reply, however there are considerable "next right answers". If indecision leads to inaction in your accumulation part the results will be foreboding. Consider utilizing some of each and develop a plan that fits your comfort zone.

The Distribution Part is the period of time between the top of a working career and, well... the end. The priority right here is that we do not know how long a time that will be. So, we run the risk of a) running out of cash earlier than running out of time, or b) not enjoying our retirement lives because we are holding onto our cash in concern of running out. The key difficulty in the distribution phase is having a plan that will account for, as greatest we are able to, how lengthy our money can final, the income that we might enjoy from that cash and steps we might take to guarantee that we will enjoy retirement without fear about running out of money. After all, when you hit retirement the paychecks are in the rearview mirror. Every plan needs to make sure there is a guaranteed supply of revenue that cannot be outlived. An earnings on the very least that will cover living bills: meals, utilities, shelter and clothing. So, not to put too fine a point on this, a few of your retirement money should find its way into an annuity.

Putting the two phases collectively to achieve a retirement income goal requires motion, dedication and ongoing attention. This is an activity that should not be postponed regardless of which phase you could be in currently. Retirement planning must be proactive, taking the motion to pay "you" first and to consider and plan for all times's contingencies. Otherwise, you might be depending on the "Blind Squirrel" strategy. That being... even a blind squirrel will sometimes find a nut.