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The Four Phases of Retirement

The Four Phases of Retirement

Retirement is a significant life transition. The retirement journey encompasses four distinct phases, each characterised by unique attributes, challenges, and opportunities. These stages serve as a structured framework, enabling individuals to gain a comprehensive understanding and effectively plan for this significant life transition.

The retirement journey encompasses four distinct phases

Phase 1: Pre – Retirement Phase

The pre-retirement stage refers to the period preceding retirement, spanning several years before the actual retirement date. In this phase, individuals commonly undergo a blend of anticipation and concern. Key characteristics of this phase include:


Pre-retirees should be assessing their financial readiness for retirement by evaluating their savings, investments, and retirement income sources. They may work with financial advisers to develop a retirement plan that ensures a comfortable standard of living.

Lifestyle Decisions

Individuals approaching retirement contemplate on how they intend to utilise their post-work years. Deliberations often revolve around choosing where they want to live (downsize, retirement village etc), deciding on potential part-time employment, or exploring new hobbies and activities.


Taking care of one’s physical and mental health becomes increasingly important in this phase, as individuals ready themselves for a life without the routine of employment. Many individuals seize this opportunity to cultivate healthier habits.

Phase 2: Early Retirement Phase (your 25 year holiday)

The early retirement phase marks the first few years after retirement. This phase is often characterised by a sense of liberation and newfound freedom. Key features of this phase include:

Routine Adjustment

Crafting a daily routine tailored to personal preferences and lifestyle becomes pivotal in this phase of transition. Some individuals may opt for part-time employment or involve themselves in volunteer activities, while others embrace a more relaxed and leisurely pace, tailoring their days to align with their chosen activities and pursuits.

Financial Adjustments

Retired individuals must vigilantly oversee their finances, making necessary adjustments to ensure the longevity of their savings and investments throughout their retirement. As they commence potentially withdrawing from their savings to complement New Zealand superannuation and to facilitate travel, it becomes crucial to maintain a strategic and adaptable approach to financial management.


During this phase of retirement, a significant number of retirees choose to delve into longstanding interests and passions. Whether embarking on extensive travel adventures, venturing into new entrepreneurial pursuits, or dedicating substantial time to a beloved hobby, those in the early stages of retirement often actively pursue sources of fulfilment beyond the confines of traditional employment. This period becomes a unique opportunity for self-discovery and the pursuit of personal enrichment.

Phase 3: Middle Retirement Phase

During the middle retirement phase individuals may encounter some unique challenges:

Financial Stability

Retirees must continue to monitor their financial situation, ensuring that their resources remain sufficient to maintain their preferred lifestyle and account for potential healthcare expenses. This ongoing financial monitoring becomes essential for adapting to changing circumstances and safeguarding their overall well-being throughout the later stages of retirement. It involves not only budgetary considerations but also prudent planning to address any unforeseen financial challenges that may arise in this phase of life.


Health concerns and the aging process take centre stage during this phase, underscoring the potential need for heightened healthcare and long-term care services among retirees. Effectively managing both health and associated costs emerges as a critical concern. As individuals progress through retirement, they may encounter an increased reliance on medical services and assistance, prompting a necessity for strategic planning to navigate potential healthcare challenges. Balancing health and financial well-being become paramount, necessitating a thoughtful approach to address the evolving healthcare needs that often accompany the aging process.


In this phase, preserving social connections and relationships takes on heightened significance as a preventive measure against feelings of isolation. Retirees often channel their attention towards nurturing their hobbies and actively cultivating a robust social network. This may involve community engagement, dedicating time to family and friends, and participating in various social activities. As retirees navigate this stage, overseas travel tends to be scaled back, and the focus shifts towards local and more accessible avenues for maintaining meaningful connections. The emphasis on social engagement becomes a crucial component in ensuring a fulfilling and well-rounded retirement experience.

Phase 4: Late Retirement Phase

The late retirement phase typically occurs in the later stages of retirement when individuals may face further challenges related to aging and financial matters.

Support and Care

As retirees advance in age, the potential need for assistance with daily activities, healthcare, and even long-term care services becomes more apparent. Strategic planning for such support becomes imperative, whether it involves relying on family, accessing community services, or considering retirement facilities. Addressing these evolving needs is a critical aspect of ensuring a well-prepared and supportive environment for individuals in the later stages of retirement. It involves anticipating potential challenges and proactively establishing a framework for the necessary care and assistance that may be required.

Estate Planning

In the latter stages of retirement, individuals often turn their attention to the strategic distribution of their assets and engage in comprehensive legacy planning. This includes the careful consideration of estate planning tools such as wills, trusts, and gifting strategies. Late retirees recognize the importance of structuring their financial legacy in a way that aligns with their wishes and ensures a smooth transition of assets to their beneficiaries.


This stage serves as a poignant period for individuals to reflect on their life and contemplate the legacy they desire to leave behind. In this contemplative phase, many retirees leverage the opportunity to impart not only financial resources but also wisdom and values to future generations or charitable causes. It becomes a time of intentional legacy-building, where individuals seek to share the lessons learned and contribute to the betterment of their family or community. The focus extends beyond monetary considerations, encompassing a broader sense of personal and societal impact that aligns with their core beliefs and principles.

While these four stages of retirement offer a broad framework, it’s crucial to acknowledge that every individual’s retirement experience is inherently unique. Successful retirement planning necessitates a flexible approach that adapts to evolving circumstances and individual needs at each stage. This adaptability is key to ensuring a retirement journey that is not only secure but also personally fulfilling. 

How FoxPlan Can Help

By going through retirement income projections, we can show you how your retirement savings, investments and KiwiSaver will provide an income in retirement.  We consider a client’s attitude to risk and return and their tolerance to risk. The projections provide some assurance that despite market fluctuations you will be able to draw down on your investments.

Retirement planning with FoxPlan offers a personalised approach to navigating the distinct phases of retirement. With a keen understanding that each individual’s journey is unique, FoxPlan tailors’ strategies to adapt to changing circumstances and diverse needs at every stage.