Our clients fall into three financial life-cycle phases: accumulation, maintenance, and distribution. 

Photo Credit:  Peter Hellberg

Accumulation - Beginning Investors 

The accumulation phase is a period when income rises, investable assets accumulate and risk tolerance increases due to growth in wealth and a long-term time horizon. After entering the workforce it is necessary to establish a financial plan, investment policy statement and analyze current asset allocation.

Midwestern Financial Group's Beginning Investor Program is designed to help individuals entering the accumulation phase. This program takes each individual through a process to better understand investing and how it can play a role in their future goals.

Photo Credit:  Mitya Ku

Maintenance - Midlife Savers, Heirs

We define the maintenance phase as the period of the financial planning life cycle when a significant amount of assets have been accumulated and retirement and/ or other goals become closer to reality. During the maintenance phase it is critical to think about money has a whole and consider how assets work together to reach goals.

The client-advisor relationship solidifies in this phase as collaboration becomes essential to a successful financial plan. Quarterly or semi-annual reviews help ensure assets are allocated according to changing circumstances. For example, many during this phase will receive an inheritance. An inheritance can change the risk/return characteristics of the portfolio. Thus, it is critical to incorporate the inheritance and reevaluate the existing Investment Policy Statement.

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Distribution - Retirees and Philanthropists

At Midwestern Financial Group, we define the distribution phase as a two-part process that includes the last years leading up to retirement as well as the retirement years themselves. The phase begins before retirement when controlling risk through extensive planning become the focus. Then, when the time comes to retire, we shift our focus to three specific risks: longevity risk (the risk of outliving the portfolio), inflation risk (the risk of losing purchasing power) and financial market risk (the risks associated with stock and bond markets).

In line with an awareness of risks, asset allocation plays a critical role in planning for and enabling a successful retirement as withdrawals can influence an individual's relation to risk. During the distribution phase clients may decide to bequest money to children, a cause or a charity. As a result, allocations may differ from someone who does not have such moves in mind and MFG plans with clients accordingly.

Additionally, there are a other factors we consider during the distribution phase. Individuals must plan for income once retirement begins and as a result, taxes, distribution laws, insurance products and income generation are items of great import. Thus, when it comes to retirement, together with our clients, we at MFG work out a plan to stay ahead of the game.