The Four Phases of Retirement: What Those Approaching Retirement Need to Know

When you realize that you may live about a third of your life in retirement, it’s no surprise that there are many important financial aspects to consider in the retirement process.   What may not be as obvious to consider is the importance of the psychological and emotional aspects of retirement.  In fact, they may be just as, if not, more impactful for you.  One resource that has resonated with many retirees is Dr. Riley Moynes’s book “The Four Phases of Retirement,” which he discussed in a 2022 TedX Talk (see below).  Dr. Moyne’s four phases can be a helpful framework to navigate the changes in identity and purpose that often happen post-retirement.  Dr. Moynes has served in public education in Canada in various roles as well as is a founding partner of a wealth management firm.   His own retirement prompted him to interview many retirees to learn more about the experiences they commonly face.   We will explore the four phases and how you can use them to help create a fulfilling retirement for yourself!

The Vacation Phase 

For many folks, the first few months of retirement are a time of freedom.  You can do what you want, when you want to with no work schedule to get in your way.  Dr. Moynes calls this initial period the vacation phase of retirement.  While not having a set schedule, relaxing and doing what you want may sound great, he found that nearly every retiree eventually hit a point where they began to feel bored, and the vacation phase lost its’ shine.   This is when retirees move into phase two.   

The Loss and Struggle Phase

Retirement brings about several losses for folks – loss of routine, identity, relationships at work, sense of purpose and for some even a loss of power.  Dr. Moynes has found these losses tend to get masked by the freedom of phase one but start to rear their head after about a year or so.  These losses can feel traumatic and bring up emotions such as fear, anxiety and even depression.  When retirees decide they don’t want to spend the rest of their life feeling this way, they are ready to move into the next phase of discovery and experimentation.  

The Trial and Error Phase 

In order to move through the feelings of loss that come from phase two, retirees must ask themselves the question “How can I find meaning in my life again?  How can I contribute?”.  Dr. Moynes has found that for many people this means engaging in things that they love to do, are good at and often involve giving back in some way.   This might come through volunteering, caring for grandchildren, part-time work or participating in groups with shared interests.  This phase involves some amount of experimentation- trying out a group or activity to see what resonates.  With experimentation comes the possibility for failure, but the key is not to give up and try a new path forward.  

The Reinvention and Fulfillment Phase 

For retirees who persevere through phase three to find their passion and purpose, Dr. Moynes notes these are some of the happiest people he has met.  As he puts it, they have found a way to squeeze all the juice out of retirement.   For most people, it seems the path to fulfillment is often found in service to others, but this can look different for different people.  This phase allows retirees to recoup all the losses they felt in phase two and create a wonderful second act.    

How to Apply These Phases to Your Retirement

To find fulfillment in retirement, it seems knowing is half the battle.  Using the four phases framework can allow you to recognize where you are in the journey and what can help you move into the next phase.  Beginning to think through potential areas of interest to explore post-retirement can help you to prepare for the challenges that may come.  For couples it is even more important to have open discussions around each partner’s current location on this journey.  This will allow you to align your expectations and move forward together towards squeezing the juice out of retirement.    

For more support with the financial considerations around retirement, reach out to connect with us to learn more.  At Clerestory Advisors, we take care of your financial life so you can enjoy the rest!

Liz Alf is the Principal of Clerestory Advisors and fee-only CERTIFIED FINANCIAL PLANNERTM located in Minneapolis, MN.  She is a member of the National Association of Personal Financial Advisors (NAPFA), the Fee Only Network and Wealthtender.  She enjoys serving clients with on-going financial planning and investment management services.