Understanding the Stages of Retirement

Whether you realize it or not, retirement is not actually the end of the rat race in life. Yes, you've worked for decades to support yourself, raise a family, provide for others, and reach your goal of walking away from the workforce and basking in the glow of your retirement funds. While many people view retirement as crossing the finish line, it is actually an event that takes place in different stages. The following stages are experienced by retirees on both a physical and mental level, and represent the major stages of life after you leave the workforce.

First Stage: The Early Years

The exact ages this covers will depend upon the age at which you retire, but for most people it covers the first five years of retirement. Physically speaking, you might travel to the places you were never able to visit when you were pursuing a career. Whether family or work stopped you, this is the phase during which you are most likely to travel to those bucket-list destinations.

From an emotional standpoint, you are most likely going to experience a sense of euphoria, along with confusion at times. No longer required to wake up early every day, sit in traffic, and answer to bosses, you are free to pursue hobbies and spend time with your partner. Working your whole life, you know where paycheck comes from and the amount. In retirement, there is no set paycheck and people often have trouble adjusting and experience ups and downs along the way. Planning ahead for your retirement can help ease some of the guilt and confusion felt when you are no longer working but still spending money.

Second Stage: The Middle Years

Again, this can cover a variety of ages, but generally spans from 5 to 15 years into your retirement. This can also be viewed as a transitional stage in your retirement. You've traveled the country or the globe, seen the places you never thought you'd visit, and maybe even spent time visiting the grandchildren.

Emotionally however, you are transitioning from a roller coaster of emotions to a more balanced state of mind. You may find that you've gotten tired of traveling, likely as a result of the security lines to get a pat down from TSA and the cost of airline tickets. An uncomfortable thought might even creep into your mind at some point in this stage; do I have enough savings to fund my retirement? Again, planning ahead will help with these thoughts of money in the second stage of your retirement.

Third Stage: The Latter Years

This stage of retirement may be much quieter than the earlier stages. Travel is still undertaken, but for some only when necessary to attend family events, and life can become routine. You may find that physical ailments and health issues restrict travel and even daily routines.

On top of that, you may run into financial issues. At this stage of retirement, a lack of financial security is the result of many earlier actions. If you traveled a little more than you had anticipated, those trips may have been undertaken by spending more than you budgeted in those early years. On the other hand, you may be spending more out of pocket on your medical expenses.

Whether you're approaching retirement in the near future, or still have a decade to go in the workforce, it's helpful to understand the different stages you'll go through in retirement. Realizing that it isn't just a singular event, but rather a period of constant transition, will make it easier for you to prepare emotionally and financially for those Golden Years. Proper planning for your retirement can help ease many emotional responses you may have to your retirement. Being financially secure throughout your retirement is made much easier with help from a CERTIFIED FINANCIAL PLANNER^™ professional, being given the proper resources can ease your transition better. Contact us at Financial Asset Management Corp. for more information on the resources available to you to help with your retirement.