You are about to enter some of the best years of your life: retirement. However, there is more to the plan than just retiring. You need to stay retired. We often divide the retirement years into three main groups:

1. The go-go years when you first retire, likely have good health, and want to be more active.

2. The slow-go years when you are relatively active but starting to experience mobility or health concerns.

3. The no-go years (the backside of retirement) when you are slowing down, traveling less, and enjoying relationships with friends and family more.

Although everyone’s time in each phase will differ, everyone will experience them at some point. Will you have the proper liquidity at the proper times to accommodate the changing lifestyle and expenses that come with these changes?

As people enter the go-go years, or begin retirement, they often focus on replacing their income from employment. Simply put, they try to be cash flow positive, where their income remains higher than their expenses. This will get them into the go-go phase, but done incorrectly, they may experience significant trouble ahead.

The trouble may come when there is a need for liquidity. A lot of financial products or strategies that may provide the desired cash flow to retire are often illiquid and can tie up substantial portions of overall wealth.

For example, annuities and real estate both provide for a stream of cash flows that can help you get that mailbox money needed to retire. However, they are both considered illiquid, and if you had a situation arise that required liquidity, you may experience a significant loss on what was supposed to be a relatively more secure strategy. On annuities, you may pay a large surrender charge to liquidate some or all of your funds (if it is possible at all), and real estate liquidation would likely come with the need to purchase title insurance policies, pay real estate broker commissions, and potentially even deeply discount the property because of an immediate need for access to the equity.

While both real estate and annuities are potentially wonderful products that may solve specific problems, those problems are only able to be identified when you zoom out and plan for retirement by looking at the entire picture. That doesn’t mean looking just at specific asset classes or at how to retire. A sound financial plan needs to consider individual factors. What is your and your family’s health status and history? How will you plan for health, long-term care, and liquidity needs towards the end of your retirement? What kind of legacy would you like to pass on to your family? What kind of risks are you capable and comfortable taking?

By starting with the end in mind and identifying your own goals, you can then—on your own or with a professional—back engineer the plan to solve specific problems that you and your estate face. Ultimately, products, regardless of type, solve specific problems, and they come along with their own risks and challenges. This is why products should be reviewed last as part of your financial plan and used on a need-driven basis to solve specific challenges you face. A well-balanced plan with this approach will be more likely to help get you comfortably through not just one phase but all phases of retirement.

Information presented is for your educational purposes only and should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but are limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented.

Encompass More Asset Management LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC) and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements