The 5 Phases of Retirement
There are five phases to successful retirement planning.
1. Savings phase starts at beginning of career. During this phase long term savings is competed against with many short term goals, paying rent bills raising kids. However it is critical to make long term savings a part of your budget as the sooner you start the less it costs.
2. Increased preparation and visualizations phase. In this phase the person is usually self motivated. He has seen the plight of others who has failed to plan, quite possibly parents and are beginning to calculate exactly what they want their retirement to look like and how much they are going to need. Greater focus is now on increasing contributions and even tapering their lifestyle to assure future success.
3. Decision phase during this phase persons have grown tired of their careers and are preparing for a definite move. Sometimes health or kids moving out influences or speeds up their decision. Health and money are accurate drivers of retirement.
4. Retirement transition and lifestyle phase this phase is the phase directly after retirement. Generally there is reduced spending on commute to work and lunches and more on travel and pursuits they weren’t able to do while raising kids and working 8 hour work days. Grand parenting may become a factor as they now have the time to indulge these new additions. Charities and activities with other seniors become more and more prevalent.
5. Frailty phase is not age restricted but more dependent on health issues, loss of mobility or caring for ailing spouse. Proximity to medical services become more important to caring relatives. Moving to a nursing home or hiring a nanny may become a reality. Financial resources help to make lack of physical independence a little easier.