Four Stages of Retirement

June 2024

For those nearing or considering retirement, there are four stages to achieving an enjoyable, rewarding and stress-free retirement.

Prior to retirement, know how much you need to fund this period of your life.  Some like to travel.  Others split their time at various owned properties.  Perhaps a rental property has to be maintained.  There may be a desire to leave money for family and charities when it comes time to move on from this world.

Rule of 4” is an approach to determine how much money is needed.  It states that you can comfortably withdraw four percent of your savings in your first year of retirement and adjust that amount for inflation each year without risking running out of money for at least 30 years.  While some feel this approach is overly simplistic, it does offer a good starting point for retirement financial planning.  The goal is to reduce the risk of outliving your assets.

Assuming you expect to be able to live off $50,000 annually during retirement, divide this number by four percent to determine the necessary value of your investment portfolio.  In this case it is $1.25 million.  Some consider four percent to be too low an expected return.  At five percent, your investment portfolio should be valued at $1.0 million to fund your retirement.

If your investment portfolio is not sufficient to get you through this period in your life, it may be necessary to work during retirement or reduce annual expenditures.

Beyond the financial aspect of retirement, transitioning from spending most of your time at work to not working is a big adjustment.  Dr. Riley Moynes, in his TEDx talks, describes four key phases of retirement.

Vacation Phase

Wake up when you want and do what you want with no set routine.  While ideal at first, most tire of it after a few years.  There are only so many cruises, resort vacations, or trips to Florida before most want something more out of retirement.

Lost Phase

Newer retirees can struggle with the loss of a routine, sense of identity and purpose that came from relationships when working.  Some struggle with fear, anxiety or depression.


Finding ways to make life meaningful once again when seeking ways to contribute.  You may try volunteering, taking up hobbies, joining a club or caring for grandchildren.  Many choose to downsize from a larger home and consider high-rise condominium living.  Living space on a single floor, wider doorways and hallways, fewer bills, lower home costs, and in-building social activities are just some of the benefits.  Another consideration is self-sufficiency without assistance, and not having to consider a retirement home until later in life.

Reinvention and Rewire

If you have successfully proceeded through the earlier stages, Dr. Moynes describes these as “the happiest people he’s ever met”.