To answer the question “how do you plan for the three stages of retirement?”, you must first understand the three key phases of retirement and their different requirements.
Years ago, retirement was generally a short period of time in someone’s life, but today, it’s not unusual for people to enjoy 20 years in retirement, or in some cases, even longer. This has made retirement planning a critical process that many individuals neglect. Planning can’t stop when you reach retirement, as every stage will see your needs change as you continue to age.
In the following sections, we’ll take a closer look at each of these stages separately and explore how you can get prepared and make the most of your retirement.
What is the honeymoon retirement phase?
This initial phase of retirement sees people who have been working and saving ready to enjoy themselves. Often, retirees are feeling at their most spry, and they embark on new projects they’ve been looking forward to, from taking long vacations, trips and tours to buying dream cars and taking up new hobbies.
While embracing this newly found freedom, those in retirement must still watch their spending. With considered retirement planning, this doesn’t have to impact their enjoyment, however. Retirement budgets can ensure retirees have the right funds available to appreciate their new pastimes or realise the long-term goals they have been working towards, but not spend so much that it lessens their standard of living later on.
What happens in the comfortable retirement phase?
After the first 10 years of retirement, most people enter this second stage. Retirees are used to their non-working life and have ticked a lot of to-dos off of their list. Life has slowed down a little, but it has become comfortable.
It’s worth noting that this is often when health concerns may arise, and accounting for medical costs is a key part of this phase. Dedicated medical plans may need to be revisited, and additional health or long-term care cover may be required to help with the extra expense.
Many homeowners opt to downsize into smaller and more accessible properties or choose to join retirement communities that offer assisted living options.
What does the winding-down phase involve?
By phase three, retirees are often in their late 80s or 90s, and they require additional funds for long-term care. At any age, retirees can decide how they would like the wealth they have accumulated to be distributed when they pass away to ensure they are ready for this stage. These plans may also involve arranging a lasting power of attorney (LPA) to make financial decisions for them in case they experience reduced mental capacity.
Do you need help from retirement planning specialists?
If you’ve been pondering the question “how do you plan for the three stages of retirement?” and would like some expert advice, at Hartey Wealth Management, we can help. Our specialist team has extensive experience assisting clients with retirement planning around Chester and Shropshire, and we’re able to help you feel secure in every phase of your future life. Get in touch today to start planning your retirement.