Deaccumulation

Most of us spend our entire adult lives at least vaguely aware that saving for retirement is a critical aspect of our financial health. However, saving for retirement is only half of the puzzle. Once we actually reach retirement age, we’re presented with a new challenge – how to spend the savings we’ve worked hard to accumulate during your working years. This process is called deaccumulation and it requires a completely different skill set than what is needed to accumulate wealth.

To spend effectively in retirement, there are critical factors to consider like:

• What are your income streams?
• What is a reasonable amount to spend each month that allows you to enjoy life while still saving enough for the future?
• What are your needs and wants?
• Do you have any personal goals you’d like to reach while in retirement, like traveling the world or spending time with family?
• Do you want to leave an inheritance?

Answering these questions will help form the basis for your deaccumulation strategy. Given the specialized skill required to successfully manage retirement funds, it may be helpful to consult a financial advisor for guidance. What else should I know? Some financial advisors may be well versed in wealth accumulation but may not truly understand the intricacies of deaccumulation.