The Phases of Retirement – Knowing Is Power

What to expect just before and right after you retire.

“Most people do not resist change. What we resist is transition. Change is a situational shift. Transition, on the other hand, is the process of letting go of the way things used to be and then taking hold of the way they subsequently become. In between the letting go and the taking hold again, there is a chaotic but potentially creative “neutral zone” when things aren’t the old way, but aren’t really a new way yet either.”
– William Bridges, author of Transitions: Making Sense of Life’s Change

At a recent women’s event, a woman mentioned to me that she felt anxious about her impending retirement. She said she had saved diligently, but she couldn’t envision withdrawing money from her savings: Was her nest egg enough to sustain her for the long-haul?


According to a study by the Insured Retirement Institute, 76% of Baby Boomers are not confident they have saved enough for retirement. Doomsday headlines such as “half of American households have no retirement savings,” or “32 percent of 65- to 75-year-olds return to the workforce” feed the fear.

The truth is, with life expectancy higher than ever, retirement looks different than it did 80 years ago when the retirement age was first set at age 65. Many factors determine when an individual will retire; it doesn’t look the same for everyone.

And until you are well into the rhythm of retirement, how much you need can be difficult to determine unless you have a plan.

A retirement plan, or financial plan, will remove much of the guesswork and allow you to rest easier. Even if you think you don’t need one (or won’t use one), putting a plan together, reviewing it and adjusting it regularly as retirement approaches—will minimize the anxiety created by this looming unknown.

Let’s assume, though, that you find yourself several years out from retirement. Whether you’ve saved enough or not becomes irrelevant. The past is the past. In this article, I will help you set realistic expectations for the years just before and just after retirement:


This is the phase at which people begin to ask more frequently, “What will my life be like in retirement?”

I ask people to envision their top five “must-do” goals for when they retire. Then, I ask them to list their next five “would-like-to-do” goals for retirement. Maybe you want to fund the college savings accounts for your grandchildren, or treat the immediate family (children, spouses and grandchildren) to a trip to Europe, or buy a second home in a warmer climate.

Once you have defined the “must-dos” and “would-like-to-dos,” gather all your bank and investment statements and make a list of what money is where and what kind of account it is.

What do the numbers say? Do you think it is possible to achieve all of these goals with the money you have saved? If your answer is “I don’t know” or “Maybe” you need a retirement plan. And the sooner the better while you still have time to make adjustments in your spending and saving habits!


At this phase, return to your list of goals and assess whether your ideas about retirement have changed. As your golden dreams edge ever closer to reality it is common for your goals to become less far-flung and more realistic.

One couple I work with has five grandchildren, and one of their top priorities is to help fund each grandchild’s four-year college education. Initially, their hope was to give each child $25,000 per year over four years. However, once we ran this spending goal through their retirement plan, this spending goal placed too much stress on their retirement savings and their ability to meet their annual living expenses. They decided to modify their plan to $10,000 per year per child and agreed to revisit the goal in a few years.

Now is also the time to ask the hard questions: Am I really ready to retire? What if I am emotionally, but not financially? What are my options to save more money? Can I spend less?

Sometimes the best option is to push out retirement and sock away more. There is no shame in postponing full retirement to create an extra cushion in your savings accounts. Increasingly, people are choosing this route. For some, it is financially necessary; for others, it is reassuring. What do the numbers say? The retirement plan will help sort this out.


At this stage, you reflect, adjust, and reflect again. Easing into a new reality, you begin to see more clearly what is and isn’t working financially. You begin to see how you fared on your retirement savings, and how your goals have changed. There are typically three categories’ people fall into:

  • Spending more than anticipated.  Sometimes, individuals find staying within a budget much harder than originally thought. In fact, overspending often occurs at this phase as individuals and couples remodel their aging kitchen, go on that special European vacation, or buy a second home. Typically, when this happens retirees are eager to reassess their spending and adjust their plan accordingly. This may entail trimming the goals list, such as postponing the purchase of a second home or rethinking a college fund for the grandkids.
  • Afraid to buy anything.  People who fall into this category anticipate the unknowns (I might live to be 100!) and realize they have to make their money last. The trap is to not spend any of the money they diligently saved for the very purpose of enjoying retirement.A widow I work with is an excellent but nervous saver. She owns her home and plans to stay there as long as possible. As she approached retirement, she realized she needed new carpeting and freshly painted walls. While we had woven this expense into her plan, she was concerned that if she actually spent this money, she could be at high risk for running out of money over the long term. Clearly, the numbers showed that these minor updates were affordable. It was important not to just remind her, but to show her the numbers!
  • The carpe-diem mindset.  “I am (we are) going to die soon, so let’s spend it now” approach is about enjoying the moment. Theses retirees would rather do all the things on their goal list while still in good health. They buy the dream house or they take the family on the big trip. They decide to worry about running out of money only when they can see that their accounts are actually running out of money.Typically, there are two reasons clients fall into this situation. First, some people feel they have deprived themselves their entire working lives and deserve to spend and enjoy life to the fullest in retirement. Second, some people believe what they don’t know won’t hurt them, so they refuse to look closely at the results of their poor spending habits and choices, chalking it up to “I figured this would happen eventually.” Bottom line, these spenders need to revisit their retirement plan, create a budget—and stick to it.


By this point, many retirees have found their new financial rhythm. Lifestyle changes mean financial changes. Retirees often have scratched their itch to travel and don’t need to go on another trip around the world. Perhaps they have moved to a smaller home with lower property taxes. Maybe they eat out less frequently. And most often they spend less on “things” as they look to clear out clutter rather than accumulate more. Most retirees find they need less to live on than they previously imagined. However, the concern over having enough money to last until the end of their plan remains.

This is where retirement planning becomes on-going financial planning, and these conversations continue to be critical.


While different in kind, the issues that individuals face at these varying phases all demand taking a realistic look at the numbers—and reassessing and tweaking on a regular basis. Financial planning is never “one and done.” It is important to find an advisor who understands the mathematical and emotional twists and turns of your retirement journey.

Regularly meeting with your financial advisor can help ease doubts and concerns as you settle into retirement living. They can help you feel more secure financially as you navigate life’s financial changes and challenges ahead. When you meet with your advisor, be prepared to ask and discuss these questions:

  • How often should we revisit our financial plan and our spending goals?
  • Are our investments aligned with our short- and long-term spending goals?
  • What spending and or investment changes should be made to strengthen our plan’s ability to withstand market downturns?
  • What if it looks like we are running out of money sooner than expected?

Financial planning is at the very heart of the quality of your life before, during and after retirement. Whether you have a lot of money or a little, having a sense of how good or bad things are as you define them will help you make better decisions today to further safeguard your future. “Knowing” really is power.

HT|TC Wealth Partners is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC. All information referenced herein is from sources believed to be reliable. HT|TC Wealth Partners and Hightower Advisors, LLC have not independently verified the accuracy or completeness of the information contained in this document. HT|TC Wealth Partners and Hightower Advisors, LLC or any of its affiliates make no representations or warranties, express or implied, as to the accuracy or completeness of the information or for statements or errors or omissions, or results obtained from the use of this information. HT|TC Wealth Partners and Hightower Advisors, LLC or any of its affiliates assume no liability for any action made or taken in reliance on or relating in any way to the information. This document and the materials contained herein were created for informational purposes only; the opinions expressed are solely those of the author(s), and do not represent those of Hightower Advisors, LLC or any of its affiliates. HT|TC Wealth Partners and Hightower Advisors, LLC or any of its affiliates do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax or legal advice. Clients are urged to consult their tax and/or legal advisor for related questions.

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