For most investors, saving and investing leads to one pivotal life event: retirement. Whether you plan to retire in 10, 20, or 30 years, developing a personalized road map in addition to understanding the possible outcomes of your investment decisions is paramount to your future retirement success.

Below are three basic investment stages into which investors can be categorized. Each stage has key concepts to keep in mind as well as how to transition to the next stage.

Stage one – Creating wealth: Start investing early to maximize potential future gains. As it is often said, compounding interest is the eighth wonder of the world. When you begin investing at an early age, you allow those contributions to grow at a greater rate due to the nature of compounding growth year after year. In this early stage of your investment lifecycle, you are typically able to take on higher degrees of risk and invest in assets and asset classes with higher return potential. By consistently saving and contributing to your retirement plan on a regular basis, for example within your company 401(k), 403(b), IRA, etc., you take advantage of the inherent volatility in the market and further maximize your returns over time. Contributing a fixed dollar amount each time allows you to purchase more shares when markets have fallen and avoid emotional decision making.

Stage two – Retirement is within view: It is time to get specific about your retirement lifestyle and avoid unnecessary risks. During this stage, it is usually prudent to evaluate your portfolio and reduce risk as your recovery period becomes smaller as retirement approaches. This is referred to as the retirement danger zone where minor mistakes, both investment and overall planning, can have major negative impacts. If you are in this phase, congratulate yourself on an investing job well done. Your focus now is to preserve the hard earned wealth you’ve created.

Stage three – Retirement has arrived: Your key investment challenge is to make sure your desired lifestyle does not prematurely deplete your retirement savings. By implementing an annually reviewed distribution strategy based not only on inflation but in concert with portfolio performance, you give yourself a greater degree of confidence for a successful retirement. This distribution style is called the Endowment Spending Policy and it is widely used by many major university endowment funds around the country. These endowments understand the importance of a diligent distribution process with a long term focus.

While reaching retirement may seem like the final step in the investing process, there are still tasks that need to be completed yearly in order to make sure that your plan reflects reality. You should continue to conduct regular checkups and adjust your plan as your situation changes.

Whether you’re just starting out, approaching retirement or already retired, knowing where you stand is the first step toward sustaining your long-term financial health. Navigating investment decisions and weighing your options with a trusted advisor who can provide a balanced perspective can be invaluable. Financial security shouldn’t be a feeling, it should be a fact.