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The retirement journey - where are you now?

Many people think retirement is marked by a single momentous event: the day they stop working. But retirement is a longer journey and what you want will change as you grow older.

A recent study by Merrill Lynch1 looked at the typical retirement journey and split retirement into four distinct stages.

What stage are you up to?

You will have plenty of spare time during your retirement but how you use that time will change.

The stages below are not rigid but it can be helpful to think in advance about what your retirement could look like for you.

Stage one - Winding down and gearing up

Pre-retirees can feel overwhelmed with work and are stressed because work keeps them very busy. They are looking forward to travelling to escape work and recharge their batteries.

Stage two - Liberation and self-discovery

The recently retired enjoy their free time. It can be difficult to adjust from having a work-centred identity to one defined by other interests. They seek personal growth, adventure, and enjoy trips that involve education and meeting new people.

Stage three - Greater freedom and new choices

Enjoyment of leisure improves and deepens. It is now easier to embrace their new non-working identity. Spending more on travel but activity levels decrease so more interest in cruises, international sightseeing and short luxury trips.

Stage four - Contentment and accommodation

Focused on maintaining good health. Familiar activities are preferred rather than seeking new experiences. Spending on travel dips and now tends to be with children or grandchildren.

Plan for the long-term

While ensuring you have enough money saved for retirement is an important part of the retirement preparation process, you also need to think ahead about your spending. You should identify your retirement goals in terms of what you want to achieve in the different stages — don’t just concentrate on the days and weeks after you stop working.

Your spending in retirement will change as you reach different stages. To help you clarify how your spending will be affected by your short-term and long-term retirement goals, speak to your financial planner.

This article was originally published in the Autumn 2017 edition of P&N Financial Planning's Portfolio Watch newsletter.
1. Merrill Lynch & Age Wave. (2016). Leisure in retirement: beyond the bucket list. Retrieved from:

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