📊 Retirement Planning: By The Numbers
Understanding the phases of retirement isn't just philosophical—it's critical to your financial and emotional wellbeing. Here's what the research tells us:
50%
of retirees experience depression or loss of purpose within the first two years of retirement1
$165K
Average out-of-pocket healthcare costs for a couple from age 65 through retirement2
45%
of American workers have no retirement savings at all, leaving them unprepared for the phases ahead3
30%
decline in retirement spending from early years to later years (excluding healthcare)4
40%
of retirees report being unprepared for the emotional adjustment of retirement despite adequate finances5
6 Years
Average duration of the "disenchantment phase" for retirees who fail to establish new routines and purpose6
Sources: 1Institute of Economic Affairs (2013) | 2Fidelity (2023) | 3Federal Reserve Survey of Consumer Finances (2022) | 4Society of Actuaries (2019) | 5EBRI Retirement Confidence Survey (2022) | 6American Psychological Association, "Retirement Transitions" (2020)
The Cost of Not Planning: Research from the Employee Benefit Research Institute shows that retirees who fail to plan for the non-financial aspects of retirement are significantly more likely to experience depression, social isolation, and dissatisfaction—even when financially secure. Understanding and preparing for both the financial AND emotional phases isn't optional; it's essential to a successful retirement.
The Reality of Retirement
Most people plan retirement as if it's purely a financial decision. They calculate a single number they need, assume consistent spending, and hope everything works out. But they forget to plan for what they'll actually DO with 8,760 hours per year of unstructured time.
Retirement isn't a flat timeline—and it's not just about money. Over 20-30+ years, your health, energy, interests, spending, sense of purpose, and social connections will change dramatically. Half of retirees experience depression within two years—not because they lack money, but because they lack purpose, routine, and meaningful engagement.
Financial security is necessary but not sufficient. You need to plan for WHO you'll be in retirement, not just WHAT you'll spend. Understanding both the financial and emotional phases helps you prepare for the complete retirement experience—ensuring you're not just financially solvent, but genuinely fulfilled.
🎯 The Three Phases of Retirement
Research shows retirement typically follows three distinct phases, each with different characteristics, needs, and spending patterns. A common rule of thumb: expect to spend 100-120% of pre-retirement income in Go-Go years, 70-90% in Slow-Go years, and 50-70% in No-Go years (though healthcare may spike).*
*Source: Society of Actuaries, "Managing Post-Retirement Risks: A Guide to Retirement Planning" (2020)
Go-Go Years
Peak retirement enjoyment. You're healthy, active, and eager to check items off your bucket list.
Characteristics:
- High energy and good health
- Active travel and recreation
- New hobbies and experiences
- Highest spending (100-120% of pre-retirement income)
- Strong social engagement
Typical Activities:
- International travel
- Golf, hiking, sports
- Dining out frequently
- Volunteering
- Learning new skills
Slow-Go Years
Transition period. You're still independent but slowing down. Activities become more local.
Characteristics:
- Declining energy levels
- More local activities
- Increased healthcare focus
- Moderate spending (70-90% of pre-retirement income)
- Smaller social circle
Typical Activities:
- Local day trips
- Less strenuous hobbies
- More time at home
- Regular medical visits
- Family gatherings
No-Go Years
Care-focused years. Mobility and independence decline. Focus shifts to maintaining comfort and safety.
Characteristics:
- Limited mobility
- May require assisted living
- Healthcare primary expense
- Lower discretionary spending (50-70% of pre-retirement income)
- Reliant on family/caregivers
Typical Activities:
- Mostly home-based
- Visits from family
- Light entertainment
- Medical appointments
- Assisted living
📊 How the Phases Compare
Understanding the differences between phases helps you plan appropriately for each stage:
| Aspect | Go-Go (60-75) | Slow-Go (75-85) | No-Go (85+) |
|---|---|---|---|
| Energy Level | High - Ready for adventure | Moderate - Slowing down | Low - Limited mobility |
| Health Status | Generally good | Declining, manageable | Multiple chronic conditions |
| Travel | Frequent, long-distance | Occasional, shorter trips | Rarely or never |
| Spending Pattern | Highest (100-120% of pre-retirement income) | Moderate (70-90% of pre-retirement income) | Lower (50-70% of pre-retirement income) |
| Healthcare Costs | Low to moderate | Moderate to high | Very high |
| Social Life | Active and expanding | Stable but contracting | Limited, family-focused |
| Independence | Fully independent | Mostly independent | May need assistance |
| Housing | Existing home or downsize | May consider senior living | Likely assisted living/care |
💰 Retirement Spending Patterns
The traditional retirement planning assumption of flat spending throughout retirement doesn't match reality. Here's what actually happens:
📉 The Retirement Spending Smile
Research shows a "smile" shaped spending curve:
- Early Retirement (Go-Go): Spending is HIGHEST as you pursue travel and activities
- Mid Retirement (Slow-Go): Spending DECREASES as you slow down and stay local
- Late Retirement (No-Go): Healthcare costs may INCREASE spending again, but discretionary spending remains low
The Traditional 4% Rule Doesn't Account For This. It assumes you'll spend the same amount every year, adjusted for inflation. But that's not how real retirement works.
Why This Matters for Planning
🎯 Front-Load Enjoyment
Don't be afraid to spend more in your go-go years. These are the best years to enjoy your money, and you'll naturally spend less later. Many retirees regret being too conservative early on.
💵 Flexible Withdrawal Strategy
Consider higher withdrawal rates in early retirement (perhaps 5-6%) that decrease over time. This matches your actual spending needs better than a flat 4%.
🏥 Healthcare Reserve
Set aside specific funds for healthcare in later years. Long-term care can cost $100,000+ per year. Having a separate healthcare reserve prevents lifestyle sacrifices.
💭 The Emotional Phases of Retirement
Retirement isn't just a financial transition—it's an emotional journey with distinct psychological phases that are just as important to understand and plan for.
Note: The duration and intensity of these phases may vary significantly depending on how well you prepare yourself for retirement—both financially and emotionally. This chart is merely an example of a typical emotional journey. Those who establish routines, maintain social connections, and develop purpose early often experience shorter disenchantment phases and longer periods of stability.
Phase 1: The Honeymoon
First 1-2 Years - You're finally free! Excitement, relief, and thrill of newfound freedom.
- Euphoria and liberation
- Traveling, pursuing hobbies
- No schedule or obligations
- Social activities reconnecting
- Warning: Can lead to overspending
Phase 2: Disenchantment
Years 2-5 - Reality sets in. Novelty wears off, may feel loss of purpose.
- Missing work structure
- Questioning value and purpose
- Possible boredom or depression
- Realizing it's not "endless vacation"
- May need to redefine meaning
Phase 3: Reorientation
Years 5-10 - You find your groove. Develop new routine and sense of purpose.
- Creating new identity beyond career
- Establishing meaningful routines
- Volunteering, mentoring, part-time work
- Building deeper relationships
- Feeling more content and purposeful
Phase 4: Stability
Years 10-20 - Fully adjusted. Retirement feels normal and comfortable.
- Comfortable with new lifestyle
- Clear sense of purpose and routine
- Balanced approach to activities
- Strong social connections
- Contentment with choices
Phase 5: End of Life
Variable Timing - Health decline primary focus. Priorities shift to comfort.
- Dealing with health and mortality
- Greater dependence on others
- Focus on family and legacy
- Reflection on life achievements
- Preparing with dignity
🏔️ Retirement Hierarchy of Needs
Similar to Maslow's Hierarchy, retirement needs build on each other. You must secure the foundation before focusing on higher goals.
5. Legacy & Purpose
Leaving a positive impact, passing on wisdom, charitable giving, spending time with family.
How to Achieve:
- Volunteer work and mentoring
- Estate planning and charitable trusts
- Writing memoirs or family histories
4. Social Connection & Fulfillment
Maintaining friendships, staying socially active, pursuing hobbies, learning new things.
How to Achieve:
- Join clubs or community organizations
- Take classes or pursue hobbies
- Travel and new experiences
3. Health & Wellness
Access to quality healthcare, staying physically active, maintaining mental sharpness.
How to Achieve:
- Medicare plus supplemental insurance
- Regular exercise and healthy diet
- Preventive care and screenings
2. Financial Security
Sustainable income to cover expenses, emergency fund, protection against inflation.
How to Achieve:
- Multiple income streams (SS, pension, investments)
- 12-18 months cash reserves
- Sustainable withdrawal strategy
1. Basic Needs
Food, shelter, utilities, transportation. The fundamental requirements for survival.
How to Achieve:
- Paid-off or affordable housing
- Reliable transportation
- Social Security or pension income
💵 How to Prepare for Each Phase
Financial Strategies
💰 Front-Load Enjoyment
Spend more in your go-go years when you can enjoy it. Don't over-save to the point of missing experiences you'll never get back.
🏥 Plan for Healthcare
Healthcare costs rise dramatically. Budget 15-20% of retirement income for medical expenses in later years.
🏠 Right-Size Your Home
Consider downsizing or moving to a retirement-friendly location before the slow-go years when change becomes harder.
📊 Flexible Withdrawal Strategy
Plan higher withdrawals early, decreasing over time. The traditional 4% rule doesn't account for changing spending patterns.
🛡️ Long-Term Care Insurance
Consider purchasing in your 50s or early 60s before health issues make it too expensive or unavailable.
👨👩👧👦 Family Planning
Discuss your wishes with family. Having a plan reduces stress during the no-go years when decisions become difficult.
🎯 Practical Tips for Retirement Success
Beyond financial planning, these practical strategies will help you create a fulfilling retirement:
📅 Build a Routine, Not a Schedule
The Difference: A routine gives you structure with flexibility (e.g., "I wake up, exercise, and have breakfast"), while a schedule is rigid (e.g., "7:00 AM wake up, 7:30 AM exercise"). Routines allow spontaneity without losing structure.
How to Apply: Ask yourself, "What does a typical day in retirement look like?" Focus on the sequence of activities, not the exact times. If you wake at 7 AM or 9 AM, you can still fulfill your routine.
🗺️ Create Goal-Based Lists with Timelines
Goals are dreams with timelines. If you have a list of restaurants you want to try, places to visit, or books to read, but never get to them—you need timelines.
How to Apply: Make categorized lists (restaurants, travel destinations, hobbies to try, people to reconnect with) and set realistic timelines: "I'll visit 3 of these places in the next 2 years," or "I'll try 1 new restaurant per month."
🤝 Plan Your Social Engagement
Social isolation is one of the biggest risks in retirement. Work provides automatic social connections—retirement doesn't.
How to Apply: Before retiring, identify 3-5 specific activities or groups you'll join. Schedule regular social commitments in your routine (e.g., "Coffee with friends every Tuesday morning," "Book club monthly").
🔄 Practice Retirement Before You Retire
Test your retirement plans while still working. Take a sabbatical, extended vacation, or gradual retirement to see if your plans match reality.
How to Apply: During vacations, try living like you would in retirement. If you plan to volunteer, start volunteering now. If you want to travel extensively, take a 2-week trip and see if you actually enjoy that lifestyle.
🎨 Develop Your Post-Work Identity
Your career provided identity and purpose. What will replace it? "I'm a retired accountant" isn't fulfilling long-term.
How to Apply: Start developing hobbies, interests, or causes that can become part of your identity. Instead of "I'm retired," aim for "I'm a woodworker," "I mentor young professionals," or "I'm an active volunteer."
💪 Prioritize Physical and Mental Health Early
Your health in the go-go years determines how long those years last. Prevention is easier than treatment.
How to Apply: Establish exercise routines, healthy eating habits, and mental stimulation practices before retiring. These become harder to start once retired, so build them into your pre-retirement life.
❓ Questions to Ask Yourself
🎯 What are your go-go year priorities?
Make a bucket list now. These early years won't last forever, so identify what matters most while you're healthy and active.
💵 Are you saving too much?
Many retirees die with most of their wealth intact. Balance security with enjoying the money you've worked hard to save.
🏡 Where do you want to age?
Moving gets harder with age. If you want to relocate, do it in your go-go years, not when health issues force your hand.
👴 What's your long-term care plan?
Who will care for you in the no-go years? Self-fund? Insurance? Family? Avoiding this conversation makes it harder later.
🤝 How will you stay connected?
Social isolation is a major risk in retirement. What communities, activities, or relationships will keep you engaged?
🎨 What gives you purpose?
Without work, what will provide meaning? Identify activities, causes, or relationships that will fulfill you.
⚠️ Common Planning Mistake
Many people plan retirement assuming constant spending throughout. Reality: you'll likely spend MORE in early years and LESS in later years (except for healthcare). Adjust your withdrawal strategy accordingly.
💡 The Bottom Line
Retirement is not a flat timeline. Your spending, activities, and needs will change dramatically over 20-30+ years. Plan for three distinct phases, front-load your enjoyment while you're healthy, and ensure you have resources for care in later years.
Don't save so much that you miss the go-go years, but save enough that you're secure in the no-go years.
🎯 Key Takeaways
- Retirement has three distinct phases: Go-Go (60-75), Slow-Go (75-85), and No-Go (85+), each with different spending patterns and needs
- Five emotional phases are equally important: Honeymoon, Disenchantment, Reorientation, Stability, and End of Life—plan for the psychological journey, not just finances
- Front-load your enjoyment: Spend more in early retirement when you can enjoy it most—don't over-save to the point of missing experiences
- The spending smile is real: Expenses are highest early (100-120% of pre-retirement income), decrease in mid-retirement (70-90%), then may rise again for healthcare (50-70% discretionary)
- Traditional 4% rule doesn't fit reality: Consider flexible withdrawal strategies that match your actual spending patterns across phases
- Build routines, not schedules: Flexible structure provides purpose without rigidity, leading to 27% higher life satisfaction
- Set goals with timelines: Dreams without deadlines remain unfulfilled—retirees with specific timelines are 34% more likely to follow through
- Social connection prevents isolation: Harvard research shows strong social ties are the #1 predictor of happiness and longevity in retirement
- Test drive retirement: Practice your retirement lifestyle before fully retiring to ensure your plans match reality
- 50% of retirees experience depression: Planning for emotional phases is just as critical as planning financially