What is a ‘Retirement Accumulator‘ compared to a ‘Retirement Distributor‘ – and why does it matter? Once you understand the difference, it will make sense. Here we go.
- The accumulator is typically the person responsible for accumulating assets for you – usually in the stock markets. This person’s sole responsibility is to accumulate as much money for you as possible so that when you retire, you have a strong nest egg to fall back on. This could come at the cost of both risk and fees, but is necessary while at a younger age (typically up to age 50-55).
- The distributor is typically the person that you begin to utilize when you approach retirement age because the distributor uses those accumulated assets to build a retirement income plan for you that will last as long as you do. This person’s responsibility is PRESERVATION and DISTRIBUTION of those assets, as opposed to ACCUMULATION of those assets. This is the time when you want risk and fees to be at the minimum (typically age 50-55 and older).
- Can the accumulator also be the distributor? Sometimes, yes.
- Is it rare that this person can wear both hats successfully? Unfortunately, Yes.
- Do most retirees understand the differences between the two? Typically, no.
When a retiree approaches retirement age, most need to look for a strong Retirement Distributor that understands that in retirement, the return OF your money is more important than the return ON your money.
Retirement Income. Simplified.