The Money Cycle and the importance of the “Preservation Phase”

The PRESERVATION PHASE is the phase in your life where liquidity and safety of your money is most important. This phase usually begins when you are no longer working and collecting a paycheck from your employer. The preservation phase starts when you are now accessing this pot of money instead of accumulating and growing your retirement savings.

This is the point in the money cycle where you must protect your hard-earned money from market volatility and inflation . The purpose of this safety is so your money will support your retirement lifestyle for as long as you live.

Allocating this money correctly will give you access to this money without subjecting your accounts to sequence of returns risk – taking distributions when your account is down and multiplying the impact of loss of the value of your balance.

Correct allocation is also critical when it comes to inflation. Today, we are currently experiencing record levels of inflation throughout the world. This is an important time to reflect and make sure your account has the right amount of protection while still having exposure to rates that will compete with inflation…

Liquidity is also important in this phase. Liquidity for those big, planned expenses like weddings, buying a new car, vacation trips, etc.

The most common mistake people make is skipping the PRESERVATION PHASE. Not correctly preparing for this stage in your life can have a detrimental impact to your retirement. Ultimately, exposing you more to the risk of running out of money in your retirement!

Corey Shevlin

Corey Shevlin

Corey serves as an investment adviser representative and handles the investment related administration for The Lynch Financial Group. He currently holds his Series 65, Life and Health Insurance licenses. He attended the University of Delaware and graduated with a Bachelor’s degree in Political Science and Criminal Justice in 2019.