The Third Phase of Life during Retirement: No, No, No

Last Updated: January 30, 2015

Do you act the same today as you did 20-30 years ago?  Do you live the same lifestyle and spend the same amount of money at age 50, as you did at age 25?  If these questions seem ridiculous, why would you expect anything different from your retirement years?  When you think about retirement, and even when you are calculating the needed size of your nest egg, you may only be focusing on that first stage of retirement. 
Early retirement may be marked by lots of travel, activities, and hobbies.  The middle retirement years may include more socialization, relaxation, and routine.  The final years may be more focused on rest and staying close to home.  Let’s look closer at what those final years may look like financially and non-financially. I previously described the three phases of retirement as “go, go, go,” “slow, slow, slow,” and “no, no, no.”  You may find you are entering the third phase when you start saying “no” a lot more often.  An inevitable part of life in these later years will include less energy, less physical strength and ability, and possibly less mobility.  This leads to a more restricted lifestyle.  You will likely spend much more time at home than previously.  You may also become dependent on others, such as adult children, for shopping, transportation, and medical assistance.  Just like in the prior phases; these changes to your lifestyle and activity level will also filter through to the financial part of your life. You should have lower expenses from less travel and fewer expensive hobbies.  However, you may see increased spending on medical expenses or long-term care cost.  Continue to monitor your retirement income need and make any adjustments to reflect these lifestyle changes.  Adjust your distribution strategy from retirement accounts so your assets last through your lifetime. A review of your risk management profile, and any insurances in place to hedge that risk, would also be in order.  Medicare is covering the bulk of doctor visits, tests, medical procedures, and hospitalizations.  Review your Medicare supplement policies to make sure they still match your needs.  Medicare part D (prescription drug coverage) should be reviewed anytime there is a change to your prescriptions.  If you have long-term care insurance coverage, review those policies to remind yourself of the benefit they will provide if needed during this phase of retirement.  Life insurance policies are no longer needed to provide income replacement, but the policies may still be kept as an efficient way to pass assets to beneficiaries.  Life insurance analysis leads us to estate planning. Truthfully, the last stage of retirement is also the final stage of life.  Your estate plan should be reviewed about once every decade to incorporate any changes from legislation, litigation, or changes in your estate planning goals.  However, the estate plan analysis you do during this retirement phase needs to be especially thorough.  You never know when an expected health problem, or even a potential loss of mental capacity, can arise.  Review and update your will and trusts.  Review your power of attorney for both financial and healthcare matters.  Communicate your final intentions to your children, grandchildren, charities or other beneficiaries.  You may also begin transferring personal items or making financial gifts in advance. Just like no decade of your working career was alike; you will also experience different phases of retirement.  Begin planning today for the unique needs and challenges each phase presents.  For assistance, contact the Certified Financial Planner™ professionals at Pension Consultants. Give us a call at 800-234-9584. Your choice is your future!  
PCI’s archived blog entries are dated, the rules and statutes referenced may have changed. The analysis or guidance within these blog entries may have become stale, dated, or no longer accurate. PCI will not update or change these entries to reflect the latest analysis or development.


Pension Consultants, Inc.



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