A person doesn’t just wake up one day, decide to be a doctor, and begin practicing right away. The journey toward a medical practice takes years of planning, patience, and dedication. The same is true of retirement. You don’t wake up one morning and say, “Today I am going to retire.” You have to plan, strategize, and execute. According to Kiplingers, having a road map is critical to retirement planning success. To that end, financial advisors often split retirement planning into the following three phases.

Accumulation. Get to work and start saving. This phase of retirement planning occurs during your prime working years. The most common mistake made during the accumulation phase is not putting enough earnings aside for saving, or not using appropriately aggressive investment vehicles. Tax considerations can also be a pitfall of this phase, as some retirement savings vehicles can have more tax advantages than others. Don’t forget to regularly check in with your accountant, as well as your financial advisor, while in the accumulation phase.

Preservation. No one can predict with 100% certainty what the stock market will do next, and although you need to have some decent market exposure during your accumulation phase as you near the end of your working years, you should take steps to preserve the funds you have accumulated by sheltering them from too much exposure. Put a plan in place to temper risk.

Distribution. This may seem like the easy part—the retirement finish line. Unfortunately, it is not that simple, and distribution may be the riskiest phase in retirement planning. You are no longer generating income, and you will need to rely on all that you have accumulated to last you for what will hopefully be a long and fruitful retirement. You will still need your assets to generate income to an extent, but you will also need to carefully balance this with reduced market exposure. You will still need to consider tax strategies to get the most out of your savings, and you may want to keep estate planning in mind as you look ahead to the distant future. A financial advisor will be invaluable as you plan out the years ahead.

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