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What are the Five Stages of Retirement?

Did you know there are five stages of retirement? Whether you are close to retirement or years away, it’s a point in life most people don’t give much consideration to. Have you thought of what retirement will actually look like for you?

If you aren’t sure what retirement will look like, these five stages will give you a good idea.

 

1) Pre-Retirement

 
Yes, there is a pre-retirement phase, which is typically the longest one as well!

Pre-retirement is typically considered to be the last 10 to 15 years of work leading up to your retirement. During this time, you should be focusing on making sure you are socking away plenty of savings in your 401(k), IRA, or other savings vessels. You can also use this time to pay off any remaining debt, like a credit card or mortgage.

During pre-retirement, you will also want to research Social Security to gain an understanding of your options.

 

2) Honeymoon Period

 
As you might have guessed, the honeymoon period is the time right after you retire. You’re done with work forever! You have all the time in the world. This is an exciting time to navigate, as you are likely to find new hobbies and ways to occupy your time. Financially, just make sure you’re not overspending during this time.

 

3) Early Retirement

 
After the honeymoon stage comes the early retirement stage.

This is a tricky stage both financially and emotionally. As an early retiree, you are likely to find your kids have moved on to start families of their own. You may not want to travel as much, and you may also decide to downsize. The “newness” and excitement of retirement has worn off.

It’s not atypical for retirees at this stage to feel like they have lost their sense of purpose. To combat this, it’s a good idea to find other ways to spend your time, such as volunteering.

 

4) Mid-Retirement

 
Once you reach age 70, you are officially in mid-retirement.

At this stage, you are finally finding your stride. You are enjoying your free time and are spending retirement doing the things you dreamed about. You likely also have your budget figured out, and feel confident in your retirement income.

 

5) Late Retirement

 
Lastly is late retirement. The age this stage happens can vary dramatically depending on your health. And as sad as it is, it’s the time you should start preparing for end of life care.

Update your will, finalize any funeral plans, and arrange additional care. Declare someone as power of attorney so you are prepared for anything that comes your way. Finally, talk with your family members about your care and wishes. While it isn’t an easy conversation, it is vital to make sure everyone is on the same page and is comfortable moving forward.

About the author

Rachel Slifka

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