Financial Planning

The Three Phases
of Financial Life

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We are often able to mitigate the “delayed” part of gratification – almost everything ships within a couple of days, we can have food delivered to the front door – we are no strangers to immediacy. This can make reaching savings goals feel exceptionally difficult. Some people feel a sense of immediate gratification when they sweep money into savings but for most, meeting savings goals and making prudent financial decisions requires a focused effort to think ahead.

Regimented savings plans can make all the difference. Many people have contributions to a retirement account directly deducted from their paycheck, or set up automatic transfers between checking and savings accounts. During one’s early career this can be a challenge but most people find a system that works for them.

Stages of Financial Life


The first phase of financial life is the accumulation phase. The accumulation phase is usually associated with a period of career growth and somewhat limited expenses (like before it’s time to send your kids off to college!!) Oftentimes we see clients who were very successful at reaching their savings goals during their accumulation phase, but didn’t begin the planning process until a couple of years before their projected retirement. This usually results in a lot of spreadsheets and sleepless nights. Remember, it is time to start planning when you reach the accumulation phase. Don’t make the mistake of simply cultivating a savings plan and mistaking it for a financial plan. By ignoring the planning process you will be missing many growth and tax-saving opportunities in the long run. Remember, the theme is thinking ahead.

There is much more to financial planning than merely saving and investing well. When we plan our lives financially, we must look ahead to future financial life cycle phases. Are your savings goals sufficient to provide the life you want in retirement? How will you manage your investment income flow when your paycheck stops? How much of your investments will you rely on during retirement? When will you take social security? How will you mitigate your taxes? Without engaging in a comprehensive planning process during the accumulation phase, you might be overfunding your 401k and missing opportunities to open a Roth IRA, which will result in tax-free income during your retirement years. Would you like to vacation more when you retire? Do you have hopes of owning a second home? All of these goals need to be thoughtfully considered during the accumulation phase, not just dreamt about. Working with a financial planner well ahead of retirement can reduce some of the financial worry when your paycheck stops. Retirement requires an individual to adapt to a plethora of changes. There are many unique variables and moving parts that need to be considered in each situation. When you’ve developed a plan with an advisor during your accumulation years, financial worry is one less piece to your retirement puzzle.

Understanding the financial life cycle phases that are to come should bring intention to the financial decisions you make today. Partnering with a financial advisor as you build wealth can prepare you for the decisions you will face when you enter the success phase of your financial life.


The second phase of financial life is the success phase – the time at which work becomes optional. The function of a good financial planner is to help people arrive at the success phase sooner than they would have on their own. Needs-based financial strategies look primarily at rate of return and time to arrive at this stage. Needs-based planning often overlooks taxes, debt, and insurance, and therefore can result in diminished wealth potential. At this stage of our financial lives, neglecting to account for these factors can impede our ability to comfortably plan for retirement cash flow needs, and may result in a few more years of work.


The third phase of financial life is next-generation planning. What will happen to the wealth we leave behind, and how will it affect those we leave it to? The estate tax changes frequently. So do Texas laws affecting estates and inheritances. Will our assets be exempt from the claims of creditors of our beneficiaries and future ex-spouses? These are only some of the issues which need to be addressed in next-generation planning.

Comprehensive Financial Planning Services Customized to Your Lifestyle

Again, financial planning is far more than simply saving money. To effectively plan your life financially, it is imparitive to employ income tax, retirement, investment, healthcare, and estate planning strategies. At Park Place Financial we offer comprehensive financial planning services so the people we help don’t face unexpected surprises as they move through their financial life cycle. If you think there might be any gaps in your financial planning future, please come in for a complimentary consultation, or call us for an introductory phone call, to see where we can help!


The 3 Pillars of Successful
Retirement Plans

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