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What steps should you take in each phase of retirement?

It’s a well-known fact that retirement takes meticulous planning and preparation, but we have suggestions on how to get started. Developing a long-term and tax-smart strategy throughout the three phases of retirement means that there are critical steps you should take to pursue your goals.

Here are action steps you can take during each phase…


1) Accumulation Phase

The accumulation phase ranges from the day you enter the workforce to your mid 50’s. During this phase, we recommend homing in on savings while you face financial milestones such as buying a home, marrying and having children, and changing your career. For more in-depth information about the accumulation phase, read our blog about how young professionals can build wealth. (Click here to learn more.)

  • Create a budget and allocate a portion of your income to savings. In doing so, you can start paying off any debts you may have accrued and accumulate a retirement fund.
  • Choose a retirement plan to contribute to, create a diverse investment portfolio, and increase your risk tolerance. For adults in their 20-30s, it’s easy to feel inundated by all the investment options out there that you may not even bother, choosing instead to procrastinate until later in life.
  • Take advantage of your greatest asset – time – and maximize your growth early on by taking on higher-risk investments. Additionally, you should take advantage of future and current tax breaks by choosing a Roth IRA vs. a Traditional IRA, which allows you to pay tax now rather than later.
  • Consider protective measures such as insurance. As your family grows, you’ll want to review plans for long-term disability, life insurance, and other forms of protection.


2) Preservation Phase

The preservation phase ranges from age 55 (about 10 -12 years before retirement age) up to the time of retirement. During this phase, we recommend that most people envision retirement as a reality and begin to really plan for it.

  • Pay off your home. Whether you plan to stay in your home or downsize in retirement, it’s a good idea to prepare yourself for the lifestyle you want to have.
  • Balance your portfolio. As you age, you may want to decrease your risk tolerance and exposure to volatile investments. You will have less time than younger investors to recover financially if your investments take a big hit.
  • Develop an estate plan. This includes establishing a will, reviewing beneficiaries, and setting up a trust. (Click here to learn more.) We also recommend that you prepare a customized family binder, where you can store all your information in one place in the event of an emergency. (Click here to learn more.)
  • Review your healthcare and insurance plan. During this phase, we recommend making any necessary changes or decisions to fit your anticipated lifestyle in retirement. This might include confirming plans for travel insurance, life insurance, lifetime annuities, long-term care insurance, and dental and vision insurance. Additionally, if you’re not yet 65 and do not qualify for Medicare, consider your social security options for benefits received based on lifetime earnings (age 62). You can also look into COBRA, Short Term Health Insurance, Medicaid, Individual and Family Health Insurance, or even getting a part-time job that offers health insurance. (Click here to learn more.)
  • Create a tax-smart investment strategy. As you grow in your career, invest, and potentially start a business, your taxes will likely grow more complicated. You’ll want to consult your advisor about strategies such as which IRA you should be in, how to minimize the tax on these accounts, and understanding the IRA tax code in general. Additionally, you might want to maximize your retirement contributions by converting your pre-tax assets to a Roth IRA, which allows your money to grow tax-free. You’ll also want to plan for large swings in income and high capital gains that could cause you to owe more than you’d planned for.


3) Distribution Phase

The distribution phase ranges from when you start utilizing your retirement income to the end of your life. During this phase, retirement begins when you draw social security and/or receive pensions as well as take out Required Minimum Distributions from your traditional IRA. At this point, it is time to enjoy the fruits of your labor, but it’s important to remember that strategizing your retirement shouldn’t stop entirely. For more in-depth information about the distribution phase, watch as we sit down with financial advisor Kiran Sharma to answer frequently asked questions. (Click here to learn more.)

  • Review your spending and income budget a minimum of once per year. We all know inflation causes prices to fluctuate, and unexpected changes in lifestyle can drastically alter your spending habits. As such, you should review your budget and portfolio annually, especially after big life events. (Click here to learn more.)
  • Consider increased healthcare costs. Potential needs for long-term care may arise, and you may have to adjust your insurance plan as a result.
  • Make any changes to your end-of life plan such as adjusting your estate plan to include new beneficiaries and any new amounts of wealth you wish to leave your loved ones.
  • Take advantage of predictable income. In order to make sure you’re earning a steady income in retirement and covering your expenses, you might try paying for necessary expenses (food, housing, transportation, utilities) with predictable income that comes from Social Security, pensions, annuities, bonds, or interest income. For discretionary expenses (vacations, financial gifts, and charitable donations) consider paying with stock dividends, distributions from mutual funds, and proceeds from selling investments. (Source).
  • Have your advisor regularly analyze your risk capacity and not just your risk tolerance. Your advisor can also help you consider what you need beyond predictable income like Social Security, pensions, and annuities, so that you can balance your portfolio and pull back from riskier investments.
  • Implement a tax-smart withdrawal strategy. Tap investments in tax-deferred or tax-free accounts such as a traditional or Roth IRA, or 401(k). You can also tap interest and dividends while leaving your original investment alone, among other strategies you can work with your advisor to employ.


Our investment advisors can help you structure retirement planning to your advantage, helping you through each phase. There are many investment strategies for retirement, and each one comes with a different set of tax rules. We can help you fully understand the tax impact for this year, next year, and 10 years down the road. We can also help you determine when you should retire and when to claim social security benefits. Not only that, but we’ll work with you to regularly review your plan and adjust it as necessary, so that you can transition into retirement worry-free.


For more information about how the Storen Financial planning process and philosophy impact our clients’ investment portfolios, watch this video from Greg Storen. (Click here to learn more.)

Additionally, check out our financial timeline, where you can access a wealth of great resources on how to prepare for retirement in any phase of life. (Click here to learn more.)

Have questions? Or interested in a consultation? Click here to contact us now. Or click here to learn more about our Financial Planning and Investment services.


Want to learn more?

Here are a few more resources to help answer your questions…
The Three Phases of Retirement – Forbes
9 Things Every Retired Person Should Do – Charles Schwab


Blog by Kiran Sharma – Financial Advisor

Learn more about Kiran and the rest of the Storen Financial team here.


A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.