In the first blog of this series, we introduced “The Four Phases of Wealth Management” and how financial priorities evolve throughout life. In our last installment, we explored the Growth & Planning Phase, a period where increasing income, growing assets, and more complex financial wealth decisions create opportunities to build long-term wealth. For many investors, the next chapter is the Preparation Phase, a time when retirement begins to shift from an abstract goal to a real and measurable milestone.
This stage often occurs during the final decade before retirement. Careers are well established, retirement accounts have had years to compound, and many major obligations begin to change. Mortgages may be shrinking, children may be financially independent, and the focus starts moving away from accumulation alone. The question is no longer simply whether you are saving enough. Instead, investors begin asking whether the resources they have built can realistically support the lifestyle they envision after leaving the workforce.
The Questions Become Bigger
One of the defining characteristics of the Preparation Phase is that financial decisions become more consequential. During earlier stages, investors generally have time to recover from mistakes, market downturns, or changes in circumstances. As retirement approaches, timelines become shorter and uncertainty often feels more significant.
Retirement readiness remains a concern for many Americans. The Federal Reserve’s 2025 Survey of Household Economics and Decision making found that only 35% of non-retirees believed their retirement savings plan was on track.¹ For investors entering the final decade before retirement, that reality underscores the importance of moving beyond account balances and developing a comprehensive retirement strategy.
Investors approaching retirement must begin evaluating how much income they will need, when they should claim Social Security, how healthcare expenses may affect future cash flow, and whether their current investment strategy aligns with their retirement timeline. These questions rarely have simple answers because every financial decision affects several others. A Social Security claiming strategy may impact taxes. Investment allocation decisions may affect withdrawal rates. Healthcare planning may influence retirement timing. The closer retirement gets, the more interconnected these decisions become.
Retirement Is About Income, Not Just Assets
Many investors spend decades measuring progress through account balances. Retirement planning requires a different perspective. Once employment income stops, the focus shifts toward creating a reliable and sustainable stream of income from the assets that have been accumulated over time.
This transition can be difficult because retirement may last much longer than previous generations expected. Advances in healthcare and longer life expectancies mean many retirees could spend 25 to 30 years or more relying on their savings and investments. While growth remains important, preserving purchasing power and generating sustainable income become equally important objectives.
A retirement income strategy often requires coordinating multiple sources of income, including Social Security benefits, retirement accounts, taxable investment portfolios, pensions, and other personal assets. Determining how and when to draw from each source can potentially impact both tax liability and portfolio longevity. Investors who wait until retirement to address these questions often find themselves making important decisions under unnecessary pressure.
Taxes Deserve a Bigger Seat at the Table
One of the most overlooked aspects of retirement preparation is taxation. Many individuals spend years focused on maximizing contributions to retirement accounts but devote far less attention to how those assets will eventually be distributed.
The years immediately preceding retirement can create valuable planning opportunities. Investors may have more flexibility to evaluate Roth conversions, review future required minimum distributions, assess potential Social Security taxation, and explore withdrawal strategies designed to improve after-tax income. Small adjustments made during this period can have effects that last throughout retirement.
For higher-income households in particular, retirement planning increasingly involves coordinating investment management with tax planning. The objective is not necessarily to eliminate taxes, but to avoid surprises and create greater predictability around future income.
Preparing for More Than a Financial Transition
The Preparation Phase is also unique because retirement is not solely a financial event. It is a lifestyle transition that can affect daily routines, social connections, personal identity, and long-term goals. Many people spend decades defining themselves through their careers. Retirement creates new freedom, but it also requires intentional planning. Retirement planning is not solely a wealth planning exercise.
While financial confidence is important, it is only one part of a successful retirement. The Stanford Center on Longevity has identified social engagement, meaningful relationships, and purpose as important contributors to well-being later in life.² Meanwhile, retirement research highlighted by Kiplinger points to social connections, health, and a sense of purpose as key drivers of retirement satisfaction.³
That is why retirement planning conversations frequently extend beyond investment accounts and income projections. Discussions often include travel plans, family priorities, charitable giving, legacy goals, volunteer work, and the lifestyle someone hopes to enjoy during retirement. Wealth planning provides the framework, but understanding what retirement should look like helps give that framework meaning.
Bringing the Pieces Together
The Preparation Phase represents a shift from building wealth to preparing that wealth for its next purpose. It is a period of refinement, coordination, and decision-making. Rather than focusing on a single retirement number, successful planning involves understanding how investments, taxes, income sources, healthcare considerations, and personal goals fit together.
In many ways, this phase is where decades of financial decisions begin coming together. The work done during these years can help create greater confidence, reduce uncertainty, and provide a clearer picture of what retirement may look like.
If you are within ten years of retirement, now may be the ideal time to evaluate whether your wealth plan is prepared for the transition ahead. At Magellan Financial Advisors, we help individuals and families bring together investment strategy, retirement income planning, tax considerations, and long-term goals into a coordinated plan designed to support the next stage of life.
For personalized guidance on navigating your wealth management journey, contact our team of wealth management professionals today!
Wells Fargo Advisors Financial Network does not provide legal or tax advice.