The 6 Phases of Retirement, Ep # 192

As you prepare yourself for retirement, you probably have a vision of your retired self traveling, spending more time on your hobbies, or with loved ones. Retirement will give you time for all that and more.

I read an article recently that describes the 6 phases of retirement. I had never defined it that way before, but this was an interesting way to delineate a natural progression of this time period. Press play to learn what these 6 phases are. 

Outline of This Episode

• [1:42] There are 6 identifiable phases in retirement
• [4:25] If you retire mid-year, is it better to reduce pretax and post-tax deductions?
• [7:06] What should we do if our RMD rules violate our safe spending rules?
• [11:04] What about using the 4% rule?

The natural progression of retirement

Have you ever thought about the natural phases of retirement? This week’s retirement headline is written by Andy Millard from AndyTheAdvisor.com. In the article, Andy mentions that much like the 5 stages of grief, retirement can also be broken into 6 identifiable phases. These stages don’t take the same amount of time and can vary from person to person.

1. Honeymoon - This is likely the most active phase of retirement and probably the one you have been looking forward to the most. People are likely to use their newfound freedom to pursue hobbies, take trips and classes, and do home improvement projects. This stage will get you out and about in the world.
2. Rest and relaxation - After enjoying the hustle and bustle of the honeymoon phase you may be ready to settle down a bit. This is the time to sit back and relax into the new slower-paced lifestyle. This stage may also bring on some introspection. You may reflect on a life well lived and think about what brought you to this point.
3. Disenchantment - During this phase, people begin to realize that the changes they’ve made to their routines are permanent. You may begin wondering about your purpose in this part of your life. This can be an emotional time period for many and consist of both physical and mental adjustments to a new way of life, whether it be a change in spending habits, a move to a new community, or changes to health. 
4. Reorientation - Hopefully the disenchantment won’t last long and you can quickly move onto the reorientation phase. This is a time when people begin to adjust to retirement and realize that there’s still more living ahead of them. Some examples of things that happen during this period are new marriages, learning new artistic disciplines, or finding new interests and hobbies. 
5. Retirement routine - This stage is inevitable since humans find comfort in and crave routine. Whether it be club meetings, volunteering at your favorite charity, or a weekly coffee chat with friends, your new reality becomes your new normal.
6. Termination - Unfortunately, at some point, retirement will end for everyone. This is--hopefully--a peaceful phase where people reflect on their life’s journey, their accomplishments, and whatever the next season holds.

Do you recognize these phases? Have you noticed them from your parents or older friends’ retirements? What are you most looking forward to in retirement?

Check out the newsletter for more links and retirement learning opportunities

Be sure to listen until the end of this episode to hear what to do if RMD rules violate your safe spending guidelines. I’ll also include links to the Guyton-Klinger rules in the Every Day Is Saturday newsletter. Head on over to www.retirementstartstodayradio.com/newsletter to sign up if you aren’t on the mailing list. The newsletter focuses on sending out relevant retirement information to educate you on your next phase of life.

Resources & People Mentioned

• AndyTheAdvisor.com - The 6 Phases of Retirement
• The Financial Ghost - Guyton Klinger Rules
• Decision Rules and Maximum Withdrawal rates the original Guyton-Klinger article
• RMD tables

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