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The 3 Critical Stages of Retirement

October 29, 2022 | FERS PensionGeneral Financial PlanningHealth Benefits (FEHB)Thrift Savings Plan (TSP)


Many people think retirement is just one portion of their lives. But the reality is that retirement contains several important parts, each with unique challenges and ways to address them. Planning a successful retirement requires a deep understanding of each one, their respective financial challenges, as well as how to maximize each segment.

When most people think about retirement, they view it as the end game. They’re excited about this new season in life that’s starting but they view retirement as a singular portion of their lives. It is much more dynamic, and we’ll discuss the three main phases and what you should consider with each.

Retirement phases

Go-Go Years

The first stage of retirement is called your Go-Go years. This is a commonly used phrase in financial planning, and this period is during the first years of your retirement. This is when you are energized, excited about this new transition, and ready to dust off your bucket list.

This phase generally lasts around five or so years for most families. They ramp up their activities and become very active. Think about what your weekends look like right now. If you’re well rested, you’re likely out and about experiencing life. The Go-Go phase of retirement is essentially the weekend every day.

It’s common for families to increase their spending during this phase. This is due mainly to the additional time resource available once you are retired. Many activities, such as volunteering, traveling, and hobbies have not had their full attention because of your professional demands. When retired, you have the resource of time handed back to you, allowing you to focus on the things you truly enjoy doing. Often, they come with a financial cost.

We specifically address the Go-Go phase when creating retirement plans for our clients. Many families believe their spending will go down once retired and are often surprised to learn how prudent it is to account for slightly higher spending during their early years of retirement. If this is likely to be your circumstance, your wealth needs to be adjusted accordingly.

Slow-Go Years

The next phase is called the Slow-Go years. Everyone knows about the honeymoon phase as it relates to marriage, but retirement has a honeymoon phase too, and once the honeymoon phase passes, we reach the Slow-Go years. Life slows down a bit after having been packed with traveling and exciting activities, and you truly begin to settle into your retirement years.

This phase can vary greatly both in time and design, and can often be the longest phase of retirement. Given its length and limitless directional choices, it can often be the most difficult for myriad reasons.

One such reason is that after having gone through the first phase of enjoying retirement during your Go-Go years, a lot of retirees begin to have feelings of disenchantment.

When you’re still working, there’s always more; there’s always another level, things to be learned and growth to be had. This creates a chain reaction that allows us to move through life in a way that gives us fulfillment, and makes time go by quickly.

But in retirement, you’re having to choose how to fill your time, and sometimes people may feel that initial emotional high wearing off. Please don’t view this as a bad thing. It’s not at all negative. It’s simply something of which to be aware and understand how to deal with it in the right way once it sets in.

Your career was a big part of your life, and the sudden removal of this can cause a sense of imbalance. When most people think about retirement they think, “I’m going to travel more, hike more, explore new restaurants, play more golf…”. Those are all great things, and I hope you get to enjoy these things too, but it’s important that you find and focus on the things in which you’re passionate.

I’ll give you examples from our clients navigating this successfully: as high-performing feds, many of them had experiences that has allowed them to be an extremely valuable resource to many different organizations.

Many of our clients sit on boards, volunteer their time for non-profits, some started a side business as consultants, others bolted onto other consulting, speaking, and training firms.

Much of that may sound like work to you, but if it involves something you love, it’s not going to feel like work. Plus, I never said it was for an income.

In retirement, you want to have the option of generating an income or not. The choice should belong to you, and the only way you can do this is by having a plan that outlines exactly what your income in retirement will look like, and how you need to structure your wealth to support that income strategy. This plan should address all the various economic needs that you will have during all stages of your retirement.

We do this for the families we serve every day, and I can attest to the mental freedom and clarity that they have, to go focus on the things that they really want to do. Removing the burden of uncertainty can be life-changing and lead to a better retirement, and I encourage you to seek this for your family too.

No-Go Years

The final important stage of retirement is what we call the No-Go years. Now, despite its rather gloomy name, this stage can be beautiful and fulfilling.

During these years, many families have seen their children become successful in their careers and have their own families. Your grandchildren may be young adults or getting close to it, and you get to develop a different kind of relationship with your family.

Many find that they deepen their relationship with those important to them, and for most of our clients, this is the phase of life in which they have the most money, wisdom, and time they’ve ever had.

This all comes at the perfect time because the No-go years are ones that may also bring some challenges. Your energy may not be as high as it’s always been. This is a normal part of retirement. You’ll likely have the most resources—time, money, and wisdom—allowing you to enrich the lives of your family and people you care about.

Most of our clients found their interests changing during this phase of retirement. They focus more heavily on their family and wanting to spend time with them. This stage is one of reconciliation and stability, which can be a wonderful part of your life. The additional resources allow you to enhance your life to a new level, and I encourage you to look forward to this part of it.

The challenging part of this phase is that some people may also experience health challenges. Roughly 70% of people in this phase will have some form of long-term care need, even if it’s just needing a little more help in recovering from a fall or something similar.

Economically speaking, these years can be more expensive from a health perspective, and the critical wisdom about this is that you planned for and addressed these needs much earlier in your life. This may be a season of life whether you need to look through FEHB plans more carefully and make changes.

If we identified in your retirement plan that you’ll be self-insuring for years of potentially high medical expenses, then this means your wealth needs to be designed in the appropriate way to handle this.

If you decided you wanted to insure against high medical costs, usually by getting Long Term Care insurance, then you need to account for the affiliated costs, and structuring your wealth to help you meet those expenses. Most LTC insurance policies have variable costs and become very expensive as you age.

Seeking Clarity

As with any transition in life, retirement comes with an array of emotions and concerns, but if you’ve thoughtfully created a retirement plan to address these emotional and economic needs, then you give yourself a better chance of having a more fulfilling and better retirement. Every day in retirement is the oldest you’ve ever been and the youngest you’ll ever be, so enjoy every moment. After all it’s not just your money, it’s your future.