Home > Insights > Retirement > The 4 Phases of Retirement

The 4 Phases of Retirement

Senior couple enjoys gardening in retirement

And Tips to Find Fulfillment in Each One

Life is made up of a series of phases, from infanthood to childhood, childhood to the teenage years, teenage years to adulthood, etc. Retirement has its own phases, and with each comes different priorities and financial requirements.

Understanding the four stages of retirement can help you live a more fulfilling life throughout each one.

Phase #1 – Transition

The first phase of retirement begins when you turn in your company keycard and computer and step out the door of your office for the last time. This phase can be both exciting and a little scary, because it marks the end of one chapter in your life and the beginning of another.

During the transition phase, take time to celebrate by doing something special with your loved ones, such as going on a family trip or throwing a retirement party. This transition phase is also the time to figure out what your life will look like in retirement. It’s an opportunity to establish a new daily rhythm and figure out what priorities you’ll focus on in the coming years.

Financial focus – During the transition phase of retirement, it’s important to have a strategic and sustainable withdrawal strategy in place to establish a monthly stream of income. It’s also important to establish an appropriate long-term investment allocation. These strategies can set you up for success later in retirement by minimizing your taxes and allowing your investments to continue growing for the next 20 to 30 years.

Phase #2 – Active Retirement

Once you settle into retirement, you may be excited to take advantage of your newfound freedom. Many retirees experience an active phase in early retirement as they pursue hobbies, travel the world, try their hand at a new business and spend time with their loved ones.

This time can be the most enjoyable phase of retirement, as you finally have the freedom to pursue your passions and enjoy new experiences.

Financial focus – During this phase of retirement, many retirees are eager to live out all their life’s dreams, which can make it easy to overspend. Focus on establishing a budget that balances your desire for adventure with your future spending needs.

Phase #3 – The Slowdown

As exciting as the active retirement stage can be, it typically doesn’t last forever. During the slowdown phase, many retirees settle into a slower pace. Some begin to reflect on their lives and consider the type of legacy they hope to leave for others. This phase is also marked by retirees seeking the company of a smaller group of loved ones and friends as they refocus their priorities on what’s truly important in their lives.

Financial focus –This phase can be a good time to revisit your estate plan and see whether it continues to reflect your legacy goals. It’s also a good time to revisit your healthcare plan to make sure you’ve properly documented your wishes and have a plan in place to cover healthcare expenses, which tend to rise during the latter years of retirement.

Phase #4 – Stability

The final phase of retirement typically includes a renewed sense of purpose, direction and reflection. Many people achieve a sense of stability in their daily routines, tending to stick close to home. This phase is also characterized by an increased need for medical services, such as nursing care or even long-term care assistance.

Financial focus – The stability phase represents another opportunity to revisit your estate plan and healthcare directives to ensure they’re updated and accurately reflect your wishes.

Could you use some help planning for the four stages of retirement? Creative Planning is here for you. Our experienced professionals help clients develop custom retirement plans to meet their needs and achieve their retirement goals. To learn more, schedule a call with a member of our team.

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.


Find out how Creative Planning can help you maximize your wealth.

Latest Articles

Ready to Get Started?

Meet with a wealth advisor near you to see if your money could be working harder for you. Receive a free, no-obligation consultation.


Prefer to discuss over the phone?