Journey Through the 6 Stages of Retirement

Reviewed by Anthony BattleReviewed by Anthony Battle

Most major life-changing events, such as marriage or divorce, involve an ongoing process of emotional adjustment. Retirement is no different. But while marriage, divorce, and other family-related issues have been the focus of decades of focus by a range of experts, from clinical therapists to religious leaders, the emotional and psychological frontier of retirement has remained virtually unexplored until recently.

Key Takeaways

• The psychological process of retirement follows a pattern similar in nature to the emotional stages accompanying other phases of life.
• Just as married couples eventually learn how to live together, retirees begin to familiarize themselves with the landscape of their new circumstances and navigate their lives accordingly.
• As with all emotional processes that can be broken down into separate stages, it is not necessary to completely achieve one stage before beginning another (except, of course, for the actual cessation of employment).

Retirement: The Final Frontier

While research on this subject has barely begun, it is clear that the psychological process of retirement follows a pattern similar in nature to the emotional stages accompanying other phases of life.

Financial advisor Diane M. Manuel, CFP®, CRPC, with Urban Wealth Management in El Segundo, California, says: “We all think that shucking a routine, especially one that may only marginally make us happy, will be easy. Think again. This routine probably began in kindergarten—60-plus years of the same thing. Get up. Get dressed. Get lunch. Go out. Come home. Eat. Go to bed. Repeat.”

Manuel adds: “My recommendation to my clients is this: As you plan for retirement, think about what it looks like. Talk to your friends. Write about it. Create a storyboard. Be imaginative. Your financial plans and your day-to-day retirement plan should go hand in hand. This is your retirement identity.”

Let’s take a closer look at each of the six stages of retirement.

1. Pre-Retirement: Planning Time

During your working years, retirement can appear to be both an oncoming burden and a distant paradise. Workers know that this stage of their lives is coming, and some might even do everything they can to save for it. But many give little thought to what they will actually do once they reach retirement. The current demands that are placed on them leave them little time to ponder this issue.

Take time to plan out what you actually want out of your retirement. Will you travel? How far, and how much? Spend time with grandkids? Will this require a move? Or will you devote yourself to hobbies that you never had time to before? All of these questions and more can better prepare you to discover what your retirement will actually look like.

2. The Big Day: Smiles, Handshakes, and Farewells

By far the shortest stage in the retirement process is the actual cessation of employment itself. This is often marked by some sort of dinner, party, or other celebration and has become a rite of passage for many, especially for those with distinguished careers. In some respects, this event is comparable to the ceremony that marks the beginning of a marriage. Stop and enjoy this moment. You’ve earned it.

3. Honeymoon: I’m Free!

Of course, honeymoons follow more than just weddings. Once the retirement celebrations are over, a period often follows when retirees get to do all the things that they wanted to do once they stopped working, such as travel, indulge in hobbies, visit relatives, and so forth. This stage has no set time frame and will vary depending upon how much honeymoon activity the retiree has planned.

4. Disenchantment: So This Is It?

This phase parallels the stage in marriage when the emotional high of the wedding has worn off and the couple now has to get down to the business of building a life together. After looking forward to this stage for so long, many retirees must deal with a feeling of letdown, similar to that of newlyweds once the honeymoon is over. Retirement isn’t a permanent vacation, after all; it can also bring loneliness, boredom, feelings of uselessness, and disillusionment.

“The toughest transition most of my clients make is the one from working and saving to retirement and spending,” says Shanna Tingom, the co-founder of Heritage Financial Strategies in Gilbert, Arizona. “It can be emotionally and financially harder than they ever expected. If they are younger retirees, and they have friends and family still working, it can also be very lonely, especially if they don’t have a plan.”

“A proper retirement plan includes three things: a financial plan, a budget, and a fun plan,” she adds. “The fun plan includes things that they want to do, places that they want to visit, and how much money is included in the budget for those things.”

5. Reorientation: Building a New Identity

Fortunately, the letdown phase of retirement doesn’t last forever. Just as married couples eventually learn how to live together, retirees begin to familiarize themselves with the landscape of their new circumstances and navigate their lives accordingly. This is easily the most difficult stage in the emotional retirement process and takes both time and conscious effort to accomplish.

Perhaps the most difficult aspects of this stage are the inevitable self-examination questions that must be answered once again, such as “Who am I, now?” “What is my purpose at this point?” and “Am I still useful in some capacity?” New—and satisfying—answers to these questions must be found if the retiree is to feel a sense of closure from their working days. But many retirees cannot achieve this and never truly escape this stage. Make sure you do.

6. Routine: Moving On

Finally, a new daily schedule is created, new marital ground rules for time together versus time alone are established, and a new identity has been at least partially created. Eventually, the new landscape becomes familiar territory, and retirees can enjoy this stage of their lives with a new sense of purpose.

“When you are newly retired, it can seem like you are riding on a roller coaster,” says Kimberly Howard, CFP®, founder of KJH Financial Services, in Newton, Massachusetts. “Peaks and valleys require attention and patience to manage. In time, the new norm will be your new reality.”

Advisor Insight

Jane Nowak, CFP®

A few of the questions I ask to help clients explore their post-retirement identity are: How do you plan to spend your time? What are your hobbies? What activities will fill your days? Are people in your social circle already retired?

Not surprisingly to me, more than a few clients, when asked these questions, realized that even though they might have been financially ready, they had not thought through some important non-financial aspects of creating their happy retirement. These folks opted to postpone their retirement by months or years.

What is the Real Meaning of Retirement?

Simply put, retirement is when you stop working for good. But it’s so much more than that. It can be a time of emotional and psychological upheaval. Retirees must face what is essentially the last transition in their lives. The first transition comes when we leave the security of home to begin our adult lives. Another major transition comes when we join the working world. Then finally comes retirement, a time when careers are done and we have the rest of our lives to ourselves.

Why Are People Not Prepared for Retirement?

Many people face retirement like a running back on the football field who dodges or plows through one defender after another until reaching the end zone. It’s hard for many workers to think seriously about what their lives will be like in 20 or 30 years when they are trying to stay on top of their mortgage, put their kids through college, and have a little fun in the meantime. They want to reach the end zone, but other issues will tackle them long before then if they don’t take immediate action.

Can You Delay Retirement?

Yes, depending on your goals and circumstances, you can delay retirement. The Social Security Administration even incentivizes you to delay collecting benefits. The earliest you can get Social Security is age 62. If you were born in 1960 or later, your full retirement age is 67. If you delay collecting benefits, you will receive an 8% higher benefit per year up to age 70.

The Bottom Line

Life planning is an important part of a successful retirement. Workers who have given serious time and thought to what they will do after they retire will generally experience a smoother transition than those who haven’t. Dreams and goals that cannot be achieved with a single trip or project may translate into long-term, part-time employment or volunteer work. But it is never too soon to begin mapping out the course of the rest of your life.

As with all emotional processes that can be broken down into separate stages, it is not necessary to completely achieve one stage before beginning another (except, of course, for the actual cessation of employment). But virtually all retirees will experience some form of this process after they stop working. Their ability to navigate these uncharted waters will ultimately determine how they live the last phase of their lives.

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