The 3 Stages of Retirement

One of the most common misconceptions about retirement is that retirement is one “single event.” What many people may not understand is that retirement, just like work-life balance, has stages. Although retirement may be unique to each person, it generally passes through three stages: 1. active retirement 2. winding down retirement and 3. inactive retirement.

Understanding the different stages of retirement and taking away the assumption that retirement needs are the same throughout all 3 phases can help you plan for your future years effectively. It is important to know that each stage has its own expenses, and those expenses greatly depend on your activities, lifestyle and health.

In order to help you understand which phase of retirement you may be, we’re taking a look at the three different stages and how you can plan accordingly for each.

Active Retirement Stage

On average, between the ages of 60 and 75, a retiree is still trying to decide what to do with their newly found free time. Retirees are still active and often find themselves looking forward to taking vacations and enjoying what life has to offer. As a result, living costs may increase.  It is common for the newly retired to spend more money than they may have spent during their last few years of working.

It is one of the reasons working with Curran Wealth Management can be very helpful during the early transitioning years from full employment to full retirement. It is a time that can be very stressful. Retirees often worry about money especially when they may be spending more than they anticipated. It seems to be especially true in the early years of retirement. Wealth management is very important all of the time but it is early retirement that can be especially difficult to navigate staying the course.

To have control in this stage of retirement, it is usually a good idea to let your money continue to grow. Our Private Wealth Managers alongside our Investment Committee help advise you on the best investment strategy for your desired lifestyle. Considering that this stage of retirement is quite exciting and full of adventure, it's important that you have the cash flow to sustain your budget. Our Private Wealth Managers have the ability to create retirement projections depending on cash flow, required minimum distributions (RMDs) and long-term care plans to be sure you are on track.

If you would like a complimentary consultation, feel free to reach out via email: info@curranllc.com or by phone: 518-391-4200 or call your Private Wealth Manager at Curran.

Winding Down Retirement Stage

The winding down stage typically occurs between the ages of 75 and 85. Here you may find yourself spending most of your time visiting family and friends and you may also start considering downsizing into a smaller home or moving closer to your grandkids and
other family members. While everyone is different in their approach, we find this stage to be routed in appreciating the important moments.

Cash flow is equally important in this stage as it was in the active retirement stage. It is why, no matter what stage of your retirement, it is important to annually review your financial and estate plans.

 Inactive Retirement Stage

This last stage begins around the age of 85.  Here, your life will change in many different ways. Typically living expenses may decline but medical expenses are likely to increase, in some cases, dramatically.

It is extremely important during the third stage to be sure your plans are in place and fully executed.

518.391.4200 • info@curranllc.com

The material contained in this article is for educational and informational purposes only.  The information herein is considered to be obtained from reference sources deemed reliable, but no representation or warranty is made as to its accuracy or completeness. This article is not, and should not be regarded as “investment advice” or construed as a “recommendation” or an offer to buy or sell a security.  The information contained in this article may not apply to your personal circumstances.  Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation.  Information on taxes is based on the tax laws existing at the time of publication.  Tax laws are subject to continual change.  In addition, tax laws vary by state.  This article is not, and should not be regarded as tax or legal advice.  We cannot ensure tax consequences of any transaction.  If you would like a detailed analysis of your tax situation, with specific tax recommendations, you can discuss the possibility of pursuing a formal relationship with Hippo Tax Services, LLC.