The second stage of the financial life cycle is preparing for retirement during a person’s later working years (approximately ages 45 through 65). It is crucial during this phase that individuals have a firm understanding of how much savings they will need to make it through retirement comfortably. This phase is also the ideal time to think about how any unexpected health emergencies will be paid for, and how much additional money you’ll need (i.e., do you want to travel during retirement?).
Individuals should also begin thinking about the different sources of retirement income they will have, ranging from Social Security to personal savings to a pension and any other additional sources of income.