Retirement In Four Stages
Posted by Gail | Filed under Retirement Planning
Did you read (or see the movie) Lord of the Rings? The Hobbits eat several meals a day: breakfast, second breakfast, elevensies, luncheon, afternoon tea, dinner and supper. I see retirement a little like the Hobbits see their meals… there are stages and if you don’t plan for them you won’t be as happy as if you did.
First Retirement: This is when you leave the job you’ve been dying to leave so you can do what you really, really want. I’m going to skip this stage since I’ve been doing what I really, really want all along. But for many people, the idea of taking off one worker-hat and putting on another is as good as retirement. Having locked in their pensions or paid off their houses, they’re ready for a new adventure. There may be a reduction in income as they follow their bliss. Or First Retirement may open up sources of income they never would have imagined.
Second Retirement: Semi-retirement holds a lot of hope for some folks. Being able to cut back on their work hours, take jobs where they can work-share, or switch to part-time means having more time for family, friends and themselves. It usually means less money too, and it’s the stage at which you’d be wise to practice living as if you’re fully retired. The more used you are to living on your fixed income, the better the next stage will be. You’ll also want to make sure you’ve got your big expenses – think mortgage, new car, home renovations to accommodate aging – out of the way.
Third Retirement: Full retirement comes next. Now you’re not working at all. You’ve got your pension, some savings, and lots of time on your hands. You’re still relatively healthy, so you want to do stuff. If you’re smart, you used your second retirement to practice what you’d do at this stage and you’re ready for all that time on your hands. You’re also ready to live on the income you now have since you’re no longer working. Stuff’s not as important, but travel may be as you seek to connect with friends and family. You’ll also want to start thinking about things like long-term care and retirement residences for the next stage.
Fourth Retirement: Your health will likely dictate when you enter this stage. Less able to get around, and more focused on doctor’s appointments than on weeding the garden, you’re less active but more worried about whether the money will last. You may also wonder about how you’ll manage with your kids focused on their own lives or living far away. In my neighbourhood, there is a bunch of folks who have been living on the same street for the past 15 years. They have all signed up for the same retirement residence. They plan to take their neighbourhood with them to their Fourth Retirement. Smart!