What Financial Season of Life Are You In?

From my 45 years of experience helping people prepare for retirement, I find they make a common mistake: They fail to see when they move from one season of life into the next.
It is easy for all of us to see the signs of weather and know when we are in winter, spring, summer or fall.  And to me, it is easy to see the signs for people who move within the various financial seasons — from accumulating money, into conservation of their money, and then finally into the distribution phase of their life.
Can you tell which season of life you are in?  Are you still in the accumulating phase and trying for a better rate of return?  If you are approaching age 55 and know you will retire in the next 15 years, what business do you have still keeping your money at risk just to get 3 percent more in growth?  If the market drops suddenly, then you could be stuck working for an extra 10 years trying to recoup your losses, way beyond your ability to do so.
People approaching the conservation phase of life, need to get out of all market risk and move on to conserving their money.  One client named Ray always calls me the first of the year and asks me what I think he should do with his investments.  I ask him a series of question just to help guide him into making his own decisions.  One of those questions is how much money does he  need at retirement?  Then I ask, if he could reach that goal, shouldn’t he move his money out of the market to keep it safe from that point forward?  If you have it made, why would you want to put that money at risk?
Another client got to age 57 and only had $12,000 saved for retirement.  He got so nervous that he took a huge risk and placed the entire $12,000 into an investment that went broke.  He lost all his money and his self-esteem. We had to work on creative and alternative ways that he could retire, but he knew it would be several years beyond what he had originally wanted to work.
Remember Aesop’s fable of the Tortoise and the Hare?  The Tortoise just stayed steady and won the race.  He didn’t run ahead and then take a nap and had to play catch-up at age 57.   For you, try to see the signs of your life and determine when you should change what you are doing.  Don’t just stay doing what you have always been doing until it’s too late to make adjustments.