Vivaldi is one of my favorites. When I could not locate my CD of Vivaldi's "Four Seasons" featuring Itzhak Perlman, I nearly tore up the house looking for it last month. I never found that CD (or my CD of Glenn Miller's "In a Digital Mood"), but in the internet age I was able to acquire the same from iTunes. Whew.
A recent article in the Las Vegas Review Journal, titled "The four seasons of financial planning," explained the four “financial seasons” of life as a means to help you see where you are now and what you need to do in the future.
Understanding the change of seasons and how to handle your money will ultimately determine if you are successful in attaining or exceeding your long-term financial goals.
While you will want to read the original article, here are some of the important financial planning tips recommended to guide you through the four seasons of your financial life:
1) Spring/Accumulation Season – ages 20 to 55. This typically is the longest financial season. What you do in this season sets you up financially for the rest of your life. This time should be spent accumulating wealth to lay your financial foundation. Set your financial objectives and begin to save and invest. Remember to leverage your employer-sponsored retirement plan, open a brokerage account, and do all you can to save, grow, and keep your hard-earned savings for the seasons to follow.
2) Summer/Preservation Season – ages 55 to 65. The key here is to protect the money you have worked to save for retirement. An important part of this strategy is to assess your risk tolerance—the amount of variability in your investment returns you can take before cashing out. Can you sit still and watch an investment go up and down without panicking and selling at the wrong time? The answer to this question measures how comfortable you are with risk. Typically, people here should be more conservative with their investment dollars. You simply do not have the time to make up for losses.
3) Fall/Distribution Season – ages 65+. At this stage your concern is with income planning. What will bring you the greatest return on investment (ROI) when it comes to your financial savings. Tax liabilities in retirement and when you withdraw from retirement savings are also very important considerations.
4) Winter/Succession Season – after your death. The last season is one for which only you can plan. How should your assets be distributed after your death ... and to whom? Without the help of an experienced estate planning attorney, your estate may not transfer as you desire and even cause family conflicts.
Your financial legacy will be dependent on how well you planned and then lived these four seasons. Regardless the current season of your life, you should talk to an estate planning attorney and get the advice you need.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: Las Vegas Review Journal (September 8, 2014) "The four seasons of financial planning"