Designing, building, and protecting a plan throughout these phases requires an integrated strategy across many life and financial areas. Crucial moments across each stage can impact your long-term achievement of whether you reach the goals you’ve set forth. The four stages of your financial life

We believe that by having a better understanding of each stage, you will be able to understand what to anticipate and plan for during each one, particularly in regard to making a retirement investment strategy.

Let us take a look at those four phases:

  • Accumulation
  • Transition
  • Distribution
  • Legacy

In the sections below, we’ll dig into every one of these so you know what to expect and think about while traveling through them. Remember, not everything will make sense for your current situation or at least for your situation at this time.

As you start your career, get married, have children, switch jobs, prepare for retirement, retire, etc., you will experience unique things based on your situation so, as stated, not all of these can apply for you.

If you have some questions about the four phases or if you’re not sure where you’re in or what you should be considering right now, we are more than pleased to assist.

With that said, let’s take a look at the four phases of your financial life.

The Accumulation Phase

Saving and investment chances should start early to fund future objectives such as education. After a profession begins, a coordinated approach to saving, investing, risk management, and tax optimization can set the basis for a smooth transition into retirement.

Let us take a look at some things to consider when going through your accumulation phase:

  • Aligning your career with your worth and financial expectations
  • Saving as much as possible within a tax-aware strategy across tax-deferred, tax-free and taxable accounts
  • Matching ordinary income-producing resources with ordinary Income tax accounts structure. This may lower the potential dollar amount of Required Minimum Distributions and position your stocks for capital gains rate and tax-free step up
  • Handling the financial risk of a spousal death
  • Accumulating growth in unrealized gains
  • Building a globally diversified equity portfolio
  • Building a healthy lifestyle part of your long-term plan
  • Optimizing asset placement and account arrangement for future after-tax distributions
  • Potentially place your equities to Benefit from tax-loss harvesting
  • Managing tax-bracket creep as your income increases
  • Drafting estate planning files in case of a premature Departure

The Transition Phase

Transitioning in the accumulation phase to generating a renewable income is essential to long-term customer success. The goals of this phase are to design a plan that reduces tax liability within the long term — not just the present decades.

Let us look at some things to think about when going through your transition phase:

  • Optimizing your tax plan for life after work
  • Estimating your taxable income in retirement
  • Creating a health plan that you can share with your Loved Ones
  • Projecting your adjusted gross income to potentially take advantage of tax plans
  • Assessing if life insurance is still needed
  • Beginning your phased career plan transition
  • Estimating your in-retirement tax rate
  • Researching Roth conversion strategies
  • Creating a tax rate bracket strategy
  • Projecting tax bracket at 70 with no tax-optimized planning
  • Adopting a low net investment income taxation (NIIT) plan

The Distribution Phase

Optimizing income from all sources — including investments — in a tax-efficient way can increase the longevity of this strategy. Smart rebalancing and distributions can increase philanthropic impact while preparing for legacy objectives.

Let us look at some points to take into account while going through your distribution phase:

  • Assessing the cost of your retirement lifestyle before-tax
  • Identifying non-portfolio 1099 income resources
  • Creating and sharing your legacy with your loved ones
  • Transferring wealth to heirs and charity
  • Donating RMD’s to charity
  • Analyzing your financial capacity
  • Assessing your progress toward your definition of non-financial success
  • Funding your lifestyle spending with the lowest tax-cost investments
  • Determining your Social Security strategy
  • Identifying any possible health variables
  • Projecting taxable income and converting investments into money where appropriate
  • Selling equities with a high foundation in up markets
  • Updating your estate planning documents
  • Selling fixed income in down markets

The Legacy Stage

As assets are transferred between spouses and ultimately heirs, it’s important to organize your income requirements, tax considerations, and other goals. This phase aims to positively impact the client’s wealth on the lifestyles of others — either heirs or charity.

Let us look at some points to consider while going through your legacy phase:

  • Equalizing ownership of equities while both partners are living
  • Ensuring your assets go where you need them
  • Aligning your plan with your values
  • Accumulating unrealized gains for nonprofit step-up in basis in the first death
  • Creating a plan for the 10-year Inherited IRA stretch: Tax rates of heirs vs. you, trust beneficiary difficulties, naming a charity as a beneficiary
  • Funding surviving spouses lifestyle with inherited assets
  • Preventing tax of liquidating assets and dispersing to heirs
  • Confirm your intentions and gifting preferences are being implemented
  • Transferring your assets at the most tax-efficient manner
  • Ensuring all your assets are titled properly
  • Updating your estate planning documents

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