The Phases of Retirement

Updated: May 4

Recently JP Morgan released a new study about retiring in 2022.

It’s full of valuable and important facts, figures and other bits and pieces of wisdom that will really help you prepare you for retirement and allow you to be financially independent.

And specifically, today, I want to talk about retiring wiser and using the wisdom that God’s given us.

Here’s one of the principles from the JP Morgan study: if you’re going to plan wisely and retire wisely, then you must factor in age. Unless you currently have a terminal illness or even chronic illness, that is likely to shorten your lifespan, it’s best to plan for longevity.

"Health accounts for the largest percentage of people’s retirement."

Here’s why: If you are a 65-year-old retiring couple, 72% of you will see at least one spouse live into your 90s and 44% of you will see at least one spouse live to 95 years old. That is huge!

Typically, people plan for their retirement funds to last through their low to mid 80s. Nothing could be further from the truth. You’ve got to plan for one spouse and part of your income to end early, while the other spouse lives on for multiple years.

Typically, when we build a retirement plan, we plan for the husband to pass away in his mid-80s and for the wife to live on another five or 10 years. She’s going to have lower social security because one of those pension checks have gone away.

So, it’s really important to build that into a plan. Do you know how many plans people bring to me that include planning for longevity? Zero. A second key principle we learned is that most people out there are expecting to work to about 65 years old.

And then they assume they don’t need to be worried about the possibility of retiring in their low 60s. Here’s the reality, the actual average age of retirement is 60 to 62. This results in many people filing for Social Security much earlier than they plan.

There are three key reasons why people must retire earlier than they planned on. One is health. Believe it or not, health accounts for the largest percentage of people’s retirement. It’s startling to realize that most Americans are not working until 65 and we need to account for those added years.

Second, company downsizing and events out of your control. It’s quite challenging to get another job when you’re in your 60s. Does your plan account for the lack of a job?

And third, the care of a spouse or family member. We’re currently working through this issue with several of our clients. One is needing to move across the country to care for her mother. She’s quitting her job and her husband must get a new job in a new location. That’s tough, right? Notice that two of those three had to do with health care.

This means that healthcare takes first place when it comes to derailing your retirement plan. It’s the number one reason why people stop working early, draw out from their savings, rely on Social Security earlier, and live a lower lifestyle than they planned in retirement.

"Retirement is a whole bunch of weekends."

I want to jump to another key area of the JP Morgan study. The first phase of retirement we call the “Go-Go” years. These years are when you’re ready to roll, travel, see the grandkids, take a road trip, or pursue a hobby. This typically happens anywhere from age 60 to 70.

When we build the plan, we account for you to spend 100% of what you usually spent when you worked. This is another classic mistake that unfortunately, people don’t address in their plan. Rarely do I ever see anyone address this issue even in the financial planning world. Let’s think of it another way.

During your working years, which days of the week do you spend the most discretionary money, or “fun” money? Typically on weekends, right? And retirement is a whole bunch of weekends. So, we need to count for an additional allotment, or “lifestyle enhancement,” to make up for the added cost.

The second phase we call the “Slow-Go” years which lasts around 70 to 80. Generally, during that time, we’re slowing down a bit, not taking as many trips, hanging around the home and perhaps gardening. At this point, we’re spending 20 to 30% less of our funds.

The final phase, some people call them the “No-Go” years. I call it the “Won’t-Go” years. I’ve seen this a lot over the years in older couples; typically, you have a spouse that wants to keep moving and one that wants to slow down.

Many times, the wife wants to stay active while the husband may just want to sit at home and watch TV. That usually happens when you get to your 80s. We find those expenses go back up to about 100% or more due to higher health care costs. I want you to realize there are legitimate challenges that most people are not preparing for.

The good news is that in our financial independence review process, we do address these situations and simulate them to stress your portfolio in case you do retire early, or a spouse gets sick. Will you have less money and potential for a lower standard of living? We give that plan to you with a high degree of certainty.

And it starts with a conversation. We sit down with you and discuss your goals, dreams, values and what’s important to you. Our team would love chat with you! Head over to to set up a call.

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