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First is the Accumulation Phase; during this phase the goal is to save the appropriate amount per year as determined by our Financial Plan. This mission should start immediately when people begin their working career. Retirement accounts are important because of their tax advantages; however, it is often just as important to keep money in liquid accounts. Call us in Buffalo, NY at 716-862-0500 to discuss these key Financial Planning and Retirement Planning differences.
The second part of Retirement Planning is the Distribution Phase; this is discussed in some detail in the other sections of our website. If you need more information on either phase of Retirement Planning--Please call our office, in Buffalo NY at 716-862-0500.
The importance of Retirement Planning, our research in Buffalo NY indicated, generally occurs when you realize that time is either your friend or is working against you. When you are young--many, many years from retirement, and not even thinking about retirement planning, that is the time when you should be making the sacrifice to force your retirement accumulations to be their strongest. Accumulating early allows time to be your friend and compounding works given a time frame. The rule of 72 is a mathematical calculation which tells how long it takes for money to double. You simply divide 72 by the rate of return or projected/anticipated investment return to arrive at the number. For example, if you are projecting a 7.20 rate of return, divide 72 by 7.2 and you will find money doubling in 10 years. If you had a 10% rate of return projected for example, and divided 72 by 10, you would expect your money to double in 7.2 years.
These benchmarks are great and point to potential returns, not actuals, as there are other variable factors such as inflation, up, down, and flat markets, as well as life events, all of which affect the outcome. This guideline is a basic planning formula to guide you toward the necessity of saving for retirement.
Oftentimes clients have Defined Benefit Plans which supplement their retirement. These can be a double edged sword at retirement as there are multiple complex choices which need to be thought through and difficult decisions reached. The decisions are oftentimes irreversible. We, at Allaire Financial Strategies, Buffalo NY, offer an analysis of these options and some solutions which may enhance these options for you. Proper Financial planning and Retirement Planning may help frame these options early enough to make these Retirement Planning solutions meaningful for you and your family.
Retirement Planning, in Buffalo NY, is a specialty at Allaire Financial Strategies Buffalo NY. Please call our Financial Planning and Retirement Planning office in Buffalo, NY at 716-862-0500 to schedule an appointment so we may offer assistance to you in either the Accumulation phase or the Distribution phase of your Retirement planning, from our office, in Buffalo NY or around the country.
Disclosure: The Rule of 72 does not guarantee investment results or function as a predictor of how your investment will perform. It is simply an approximation of the impact a targeted rate of return would have. Investments are subject to fluctuating returns and there can never be a guarantee that any investment will double in value.