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We all go through different stages of life. Whether it’s dying our hair pink or moving to a new city, these stages represent different phases. As each stage inevitably ends, a new one opens up. It’s the accumulation of these stages that turns us into the people we are today.

While there’s a degree of poetic beauty to this line of thinking, it’s also true for financial planning. In fact, there are actually three distinct stages of your financial life. These three stages are wealth accumulation, wealth preservation, and wealth distribution. Much like life in general, you can’t enter one phase without the other.

Based on the decisions made in each financial planning stage, you'll determine your economic fate. Sounds heavy, right? Well, that’s why it’s essential that you know what you’re doing. That’s where we come in. Here's what you need to know:

Wealth Accumulation

If this stage were a sport, this would be your athletic prime. This is where you embrace the daily grind and put in all your work. You’re building a foundation for your eventual legacy outside the sport to be cemented. You’re healthy, active, and at your peak in terms of career position and salary.

With all that in mind, this stage is all about saving. Since this is the time when you’re making the most money, you need to plan for the future. Don’t blow all your money in a hurry just because you have it. Take some time to sit down and consider where you are and where you want to be after your work life is over. The most important thing to have is some kind of plan and direction in this stage.

Another key is timing. The earlier you start, the better off you’ll be. If you start saving money from a young age, even at a modest level, that money is going to accumulate over the years before you know it. Every amount you put into a TFSA or RRSP will add up over time, and you’ll be better positioned for the next stage.

Wealth Preservation

Now that you’ve put in the groundwork, it’s time to lock things down. This stage is when you start thinking about retirement planning after years of accumulation in your work life. You’ve been working hard to save. Now, you need to reevaluate all your investments and what you want out of them once you retire.

This is dependent on your retirement planning goals. It’s also a time when you should look into business succession planning, tax-planning strategies, and even annuities. Look at your retirement portfolio and hone in on the areas where it’s thriving and where it could use some work. Perhaps you want to take fewer risks in your portfolio as you head towards retirement or make sure your children are financially secure. These are things that you need to consider during this stage.

Wealth Distribution

Retirement is at your doorstep. This is where all that money you’ve saved and all the investments you’ve made finally pay off. Since you no longer have regular paycheques from your workplace to rely on, this is where the wealth accumulation and preservation stages become your saving grace.

The wealth distribution stage is more conscious than calculated like the other stages. You have to remember that the way you choose to distribute your money will impact how it lasts. Speaking with an experienced wealth manager can help you prepare for this stage.

At Ocean Wealth, we specialize in customized financial planning and retirement planning solutions. Contact us today to learn more about how we can help you get started today.