The Five Phases of Retirement

Retirement is not an event, but a process that starts many years before the actual date. Whether you have set money aside and actively planned for your retirement, or merely thought of it as a vague image in the future, you have moved through various phases. Understanding these phases will help you make the most of your retirement experience.

Phase 1: Daydream Phase. Usually occurs five years before retirement. Consists of fantasizing about what retirement will be like. May include unrealistic goals, like retiring to a deserted island, or may consists of the daily activities denied to a working person, such as sleeping until 9:00 am every morning.

Phase 2: Expectant Phase. This occurs as the person is nearing actual retirement. This is a mixture of fear and excitement. Fear is associated with retirement cost of living and whether the person will have enough money to sustain themselves throughout the rest of their life. Ninety-eight percent of people, regardless of retirement income have concerns about outliving their finances. In addition to money, the person faces the reality of having to take responsibility for their future happiness. Concerns about having enough to do or staying connected to others may come to the surface.

Phase 3: Celebration Phase. The day has finally arrived. Just like with marriage, the first year of retirement is considered the honeymoon phase. The new retiree finally has the time to do the things that have been put off for years. This includes projects, such as cleaning out closets and other chores around the home, seniors travel to visit family and friends, starting new leisure activities, hobbies and taking classes. Hopefully, during this time, the new retiree will engage in self-examination where they assess their needs and establish a life purpose.

Unless the new retiree returns to a retirement job, and many do, filling spare time becomes a major focus. Leisure activities become more important as they fill different objectives. On the one hand, leisure activities become a way to fill time, which a major shift from a time of being too busy with the former working world. Leisure activities can be the primary way retirees stay connected to others, whether it is through taking classes or playing golf. The ability to feel connected is primary to determining a satisfying retirement. From these activities, people generally establish a routine to keep busy, but also as a way of relaxing and enjoying their time.

Phase 4: Renegotiation Phase: From the second year forward, the retiree is in the process of making either a successful transition into retirement or is struggling to do so. Based on research conducted by Ameriprise Financial Services, they found people fall into four general groups.

At one end are the Clueless. This group may comprise as many as 40% of adult seniors. They may experience depression and loneliness. They are often bored with their free time choices. They may feel the most disconnected from others. They also report the least amount of planning or thinking about retirement.

The Aimless comprise another 22% of retirees. This group is still looking for a sense of satisfaction in retirement. They report feeling neither positive nor negative about retirement. Like the Worried Struggles, they gave little forethought to retirement and are now trying to figure it out. Less than 20% had made plans for hobbies and only 36% have a notion of how much money they would need.

Directionless consist of 19% of retirees. This group is happy to adjust to a less frantic lifestyle and is enjoying the lack of stress of work and raising a family. They are not interested in learning new things, finding meaningful work or getting hobbies.

The Empowered Reinventors are at the other end of the continuum with 19% of people. They view this period of time as one filled with new challenges, adventure and personal fulfillment. They have planned for retirement both financially and for activities. They are involved in travel, staying connected to family and friends, and stay in good retirement health. They are engaged in meaningful work that may be paid or unpaid, and challenging hobbies or other leisure activities. They are not keeping busy for the sake of busy-ness, but from wanting to fulfill a sense of destiny. Often there is a change in perspective from individual needs to being altruistic that in turn strengthens their sense of self.

Phase 5: Reconciliation Phase. As the body gets older, it will eventually slow down. How this last phase is faced is largely based on how the retiree negotiated Phase 4. For some the last phase can be difficult, as one faces the end of their life in our stereotypical view of old age. For those who have found peace with themselves and the world around them, the final phase can be one of contentment. As the body slows down, they may take on the role of sage or elder in their family or community.

This single most important aspect of retirement is freedom of one’s time. The ability to manage time wisely is critical to a successful retirement. Finding fulfilling activities that are challenging, meaningful and keep you connected with others are important factors in using your time wisely.


About Cathy Severson

Cathy Severson helps baby boomers find more meaning and purpose in their lives and work. Get your copy of her complimentary e-book Guide to Retirement Activities a comprehensive look at work, volunteering and leisure based on an individuals’ personalities. Call for a complimentary 20-minute consultation to answer your most pressing concern. 928.775.4949 or email Cathy at

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