informed decisions blog

The 5 Stages of Retirement #214

23rd January 2023

Paddy Delaney

5 Stages of Retirement

Interested in hearing about the different stages of Retirement? You are in luck!

I estimate that there are approximately 100 people retiring today, and tomorrow etc. etc. Of these c100 people retiring each day of the week, some are really well prepared and will have a smooth journey.

However, others will be less prepared and so face a little more challenge and hurdles. My hope is that this piece will help a few to blow any hurdles out of their way with ease!

Key Takeaways

  • Start preparing in stage 1 – pre-retirement
  • Be prepared for a low period
  • You will reach a point where you need to evaluate your purpose
  • The last stage is finally finding purpose and stability

Approaching retirement, you’ve probably put in the time to ensure your financial future but may have brushed-over the more emotional effects of transitioning from full-time work. It is not only an exciting time but a time filled with emotion and fear of the unknown.

Here we’ll talk about the non-financial retirement stages that most go through. And of course, everyone experiences things differently, but this framework may be helpful to some as they prepare and indeed travel on their own journey!

The general consensus is that there are 5 stages of retirement.

Stage 1 Approaching Retirement or Pre-retirement

This first stage is one we are all probably most familiar with. It encompasses the years leading up to you taking the leap out of full-time employment.

This can include a transition period where you might still work but gradually reduce the amount of time you invest in employment. In the years prior to exit, many people start to seriously look at their financial planning and want to ensure they can live comfortably when they start drawing pension income. It is usually around here when people might reach out for an independent financial planner to help map it all out!

What people often neglect during this stage, is making emotional plans, so to speak. They may become so focused on maximising their careers, pensions, and financial strategy, that they don’t make time to consider and plan the non-financial aspect of the journey.

This stage can typically last from 1 to 5 years, in my view, depending on how planful someone wants to be! They use this time to have a well-rounded financial and strategic plan in place. Retirement is wonderful, but it is not all smooth sailing. As you move through the stages, you will have highs and lows.

Using your pre-retirement period to prepare will help you navigate your lifestyle changes more confidently and with fewer challenges.  Our blog, Retirement Decision Factors, will help you in stage 1.

In my experience, the friction between wanting to exit, and being confident about being fully financially prepared can be quite a challenge for some. In some ways, analysing the ‘worst case scenario’ can be a helpful thing to do, to develop confidence in your own plan.

Stage 2 The Honeymoon

Stage 2 is what I refer to as ‘the honeymoon’ period. You’ve finished working, and at first, this can be exhilarating. You now have tons of time that you can dedicate to yourself, and what you want to do. It is utterly novel for most people!

For many, this stage is very liberating. Pressure is relieved, and the freedom to pursue new adventures is wide open. Some might go overboard with activities and things to do and live very busy lives. While some might take some time to sit back and relax so they can recharge after many years of a stressful job.

However, not having any plans for this stage can lead to you prematurely reaching stage 3.

Stage 3 You Become Disenchanted

The sparkle of the honeymoon period is well worn by now. You grow tired of the novelty of doing anything and everything (or nothing!). This stage can come quickly or potentially after a year, depending on how much fun you were having at the honeymoon! It can be one of the most emotional stages of retirement in terms of lows.

You may not have prepared emotionally enough in stage 1, tried to take on too much in stage 2, or just gone a bit off track. This may leave you suddenly feeling deflated or like retirement isn’t what you thought it would be. You might even start to suffer from depression.

St. Patrick’s Mental Health Services states that depression “affects 1 in 5 over the age of 65.”

One way to describe it might be like the anticipation you feel the night before Christmas, especially as a child, only for the following day to come making you feel anti-climatic and a little ‘blah’. If you get bored, lose your sense of purpose, and just feel like everything becomes a chore, that is going to hurt.

While we are unlikely to completely avoid this stage, you can help minimise the effects. Try to nip any beginnings of these feelings in the bud straight away. Take a step back and regroup.

It might mean trying something new and cutting out activities that you no longer enjoy. It can also help to talk to someone you trust about your concerns, and seek professional support or coaching in the areas you are struggling with, immediately.

Take time to deeply reflect on what you want your retirement to be, without the influence of others in your life, in order to discover what you really want. 

Stage 4 Reevaluation

Stage 4 is reevaluation or, as some call it, reorientation. You’ve done some personal reflection in stage 3 and are ready to make some changes with the goal of a more enjoyable and sustainable retirement. 

This stage is all about trying to find your new sense of purpose and identity, if needed, and moving away from the identity that your career gave you for many years. 

To help you transition through this and the early stages, it is a good idea to begin preparing in stage 1. Work on building a network of friends that are not connected to work but connected to similar interests.

Finding a new purpose may help you close to the door to your old self, if you need to! That ‘old self’ can often seem to hold people back from fully engaging with their new adventure.

It might be causing you to feel lost when it disappears on leaving employment. Open a new door to fulfilling activities, be it doing volunteer work, pursuing new passions, or spending more time with your family.

It is a time to really work on yourself. In my experience, a lot of people eventually get drawn toward supporting others in some way, shape, or form. It may sound cliché, but many people really do seem to gravitate towards helping other people, and get a huge amount of personal satisfaction and purpose from it.

I remember my own parents, on their retirement, spending time each week in various activities that provided learning and challenge; helping their siblings in family and business, volunteering with a local hospice, and teaching non-nationals to read and write English with another local charity.

Each to their own. We all ought to give ourselves the time and space to find the things that we will really enjoy.

Stage 5 Stability

Great news, this last stage of retirement is said to be the most satisfying, and indeed the longest! The last stage of retirement is stability. How long it takes to get here will vary from person to person. For some, it will come within Year 1, for others, it may take several years. As you’ll have guessed, good preparation can help you get to this point more quickly.

In the stability stage, you have found enjoyment in your new identity, and conviction around your sense of purpose and where you ‘fit in’! You are much more confident and have a stronger sense of fulfillment.

To ensure this stage doesn’t sneak away from you, it is good practice to regularly check-in with yourself to ensure you continue to spend your time doing things you really do enjoy! Like anything, if we fall asleep at the wheel, we might end up in the ditch, so to speak!

Final Thoughts – Stages Of Retirement

The 5 stages of retirement are part and parcel of the new adventure and self-discovery for many people. As with anything worthwhile, it won’t all be easy. Some phases will be properly challenging.

Doing plenty of preparation and developing simple plans for yourself can help make those hurdles a little less daunting when they arrive. Ultimately, the journey will be a smoother one for you. And as it is good to remind ourselves occasionally, it’s about the journey, not the destination, right!?

Resources: Dr. Riley Moynes Tedx – The 4 Phases of Retirement

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