The Changing Seasons of Financial Planning

Just as there is a spring, summer, fall and winter, there are also four financial seasons of life that include accumulation, preservation, distribution and succession.  Approaching your finances with these four seasons can help keep you on track to reaching you long-term goals. 

1. Accumulation Season. This is the longest financial season and the time spent accumulating wealth sets the foundation for your entire life.  This is an important stage to set your financial goals and save and invest wisely. 
2. Preservation Season.  During this time, it is important to protect the money you have worked hard to accumulate so you can depend on it during retirement.  This is the time to begin assessing your risk tolerance and perhaps become more conservative with investment dollars.
3. Distribution Season. Income planning is critical during this season, as you determine how to make the most of your financial savings.  Consider your tax liabilities in retirement and the order from which you withdrawal from your retirement savings. 
4. Succession Season. You must consider what will happen with the remainder of your life savings after you pass.  Without proper planning it can go to taxes and fees rather than heirs. 

See Brad Zucker, The Four Seasons of Financial Planning, Las Vegas Review Journal, Sept. 8, 2014.