3 Stages of Retirement

family hiking to lookout point representing active stages of retirement

“Understanding the stages of retirement can be useful in developing a successful retirement transition plan.”

When you are toiling away in the trenches, it is easy to see retirement as a far-off dream.
What is your vision, and what will it look like in reality?

With some planning, you can have a great deal of control over the outcome. It’s important to address the retirement planning process with that in mind.

The financial aspect of retirement has been well covered. Entire forests of trees have been leveled to create guidebooks and worksheets aimed at building retirement security and helping diligent savers become happy and successful retirees. Those financial concerns are certainly important, but they are not the only factors to consider in your retirement planning.

Even the most well-heeled retiree may get bored in their post-work life, and no amount of golf will be enough. For your own retirement to be successful, it’s important to move beyond the merely financial and reach into the personal as well. It can be helpful to think in terms of a progression through three stages of retirement – from the initial excitement you feel when leaving your final retirement party to the more stable parts of your post-work life.

Retirement Stage #1 – The Active Phase

The active phase of retirement may be what you were picturing when you were working hard to make ends meet and saving as much as you could. Now, it has finally arrived.

This initial active stage of retirement living can begin as you drive out of the parking lot for the last time. Your head will be full of excitement and plans for the future, and you’ll spend the active phase of your retirement making those a reality. You’re looking forward to take having time for academic classes, workshops, or joining some clubs.

During this phase, you want to consider ways to replace some of the good things about working, such as a regular structure to your day or a sense of purpose. But without the stress! Many retirees use this time to volunteer in their communities, start a business, or do some consulting. You will also have more time to pursue your favorite hobbies, some old ones and some new. You might travel to see your “bucket list” destinations, and make more frequent visits to the grandkids along the way.

Travel, fun, and a new beginning

All in all, this stage of retirement can be incredibly rewarding, the time when your hard work has been acknowledged and your post-work lifestyle is just taking shape. You feel physically and mentally capable as you are adjusting to a big transition in your life. You’ll also be setting the stage for what’s to come.

Retirement Stage #2 – The Stable Phase

The middle stage of your retirement will likely be about stability –in your finances, your personal life and in your daily activities. You might find yourself spending more time at home and focusing your volunteering or interests on more specific aspects of the causes that are important to you. Memoir-writing appeals to a lot of people in this reflective, more routine of the three retirement stages. 

The stable phase is when your post-work identity is formed, and often there are some growing pains as you search for meaningful purpose and confront disenchantment. It’s definitely an adjustment as you slow down from the active first stage. A coach or mentor is invaluable as well.

It’s common to opt for one or two big getaways each year instead of the constant go-go of the active stage. Maintaining good health is even more vital now, giving you the energy to continue your retirement lifestyle plans and devote time to the things you are truly passionate about.

Maybe it's time to downsize and simplify

You may also decide to rethink the place where you live. Retirees in this phase often elect to downsize from a large home, with its many maintenance requirements, and relocate to a smaller home in the same town or an entirely new community. You might find that the condo life is a great choice, or that seeing the world from the balcony of a luxury apartment is just the thing.

Retirement Stage #3 – The Settling-In Phase

It is easy to think of retirement as a single stage in your life, but it is more realistic to break this chapter of your life into distinct parts of an overarching whole. As you move into the later years of your post-work life, you’ll enter a time sometimes referred to as the settled phase.

This part of retirement can be characterized by settling in, simplifying, and relaxing, but you may find some new challenges at this time. Maintaining our health during this stage can require more time and attention than it used to. Remaining active with our family and friends, and with causes important to us, can contribute a great deal to success during this phase.

What makes the third stage unique is that you may now require some level of support which you didn’t need or want before. Time and age start to play a role at this point, perhaps prompting you to move to assisted living or a senior community. Since the euphoria of stage one and the adjustment of stage two have passed, in stage three you should feel content and realistic in your expectations.

Keep the Stages of Retirement in Mind

Planning for and understanding the three stages of retirement, from the excitement of the active phase to the stability of the middle phase to the settled lifestyle of the third phase, can be useful from the outset in developing a successful retirement transition plan.