Let’s say you want to climb a mountain. What’s your goal? Most of you said to yourselves, “To get to the top?” But the correct answer is to get to the top and get back down!
In fact, the British Medical Journal published a report that found that only 15% of deaths occurred while ascending Everest. It is the descent that’s the most dangerous.
In this analogy saving during your working years is like climbing up the mountain. Your working years are your prime saving years. Typically, your income increases from year to year as you receive promotions or pay raises. While you're working, your retirement objective generally is to grow retirement savings as much as possible, and investments that offer higher potential reward in exchange for greater potential for volatility and/or loss are often the focus for those retirement savings.
When you retire, on the other hand, income rather than accumulation becomes your focus. Your sources of income may include Social Security, employer pensions, personal savings and assets, and perhaps some income from working part-time. We consider all these factors when creating a retirement income plan for our clients.