The Phases of Retirement and How to Prepare for Them

Everyone has a unique vision for how their retirement will unfold — a story they want to write for themselves once they move to the next phase of life.

“The story is different for each person,” observes FPA member Monica L. Dwyer, a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional with Harvest Financial Advisors in West Chester, Ohio. “In the beginning, some grapple with not working. One client told me that it took him a full year before he could relax and enjoy the morning paper without feeling he had to be somewhere. Others slide right into retirement and have been waiting for it for so long that they are really ready.”

However unique a person’s vision for the next phase of life may be, though, there is a common thread to peoples’ stories, a reality that it’s important to be aware of, and to plan for in advance: the likelihood that retirement will unfold in several distinct stages, each with its own set of circumstances, priorities, challenges and rewards. According to U.S. government figures, a man reaching age 65 today can expect to live, on average, until age 84.3. For a woman turning 65 today, the average life expectancy is 86.6. What’s more, about one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95.

Simple math suggests that for many people, retirement could last two or three decades — or more. By having a clear idea of what each stage of retirement might look like, people can take important planning steps in advance to position themselves to make the most of each stage.
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