About Retirement & Retirement Planning

The early stage (age 65–74)

This first or early stage of retirement will, for many, be the 'doing' years.  

Travelling, seeing family, spending more time on those hobbies and interests, and just getting on with it. You might expect to be physically and mentally capable of living a fairly active lifestyle. In fact this phase may not be that much different than pre-retirement except that there may be more time to do things like travel and hobbies.

This stage could also still include work. It may be part-time work or consulting in the same field of your pre-retirement career, or it may mean self-employment. Whatever the case, active retirement is really living the stereotypical retirement dream. For many retirees in this phase, they're busier than they were prior to retirement.

It's common for your mind and body to be sharp and to be excited to embark on new adventures. As a result, you may find this to be the most expensive phase of retirement. Travel, boats, hobby cars or dining out with friends are often the fun things in life we look forward to in retirement. However, you’ll have to balance these increased costs to ensure you don’t consume your savings in the first 10 years.

Careful advance planning means you’re more likely to enjoy everything you want in your early retirement years while also safe guarding your future income. 

The middle stage (age 75–84)

This middle years of retirement may be more about consolidation.

The need to travel, or just the hassle now of doing so, is less exciting and your focus is more on the simple things in life. Getting the family to come and visit you, thinking about perhaps downsizing the house and moving to something smaller with less maintenance. Sometimes your body is telling you to slow down a little.

Often this happens between the ages of 75 and 84: life starts falling into patterns and the excitement of retirement transitions to more of a daily routine. Routines such as seeing family at home on Sundays, groceries on Tuesdays, friends on Friday, etc. Part of the reason for these patterns is that energy levels are changing and patterns help minimise effort and thought without compromising on the enjoyment of life.  

The older you get, the more important it is to find routines and patterns that give you comfort and security. Maintaining regular activity, though, is important as well, but it might just mean you need to slow it down a little!

During this middle stage of retirement, many are still pursuing their hobbies and traveling but at a slower pace, which means steady costs. Ideally in this stage, health-care costs have been planned because sometimes health issues prompt unexpected spending on health services. 

The cost of living typically plateaus in this period, but you may be considering downsizing your home or thinking about the benefits of retirement villages. Releasing the equity tied up in the family home sometimes becomes an necessity as you may find yourself asset rich but cash poor. 

Not having spare cash makes it harder to maintain the house and find money for the enjoyable things in life, like pampering the grandkids or going on another trip.

The late stage (age 85 plus)

This third stage is a time of reflection and time at home.

At this phase of retirement, chances are you’ve done what you have wanted and are now spending more time at home. There is often a transition to managing your own personal circumstances, which can be dominated by managing your health and well-being.  

Time and age play a role in slowing down activities and abilities. Sometimes this is mental, sometimes physical and sometimes it can be financial. There are often more pressures around managing the challenges of your physical health and potentially your cognitive decline.   

Cognitive decline is likely in some form, and careful planning of health care is needed, along with support to manage any assets and investments you may have to help meet these costs. It is common to be balancing your needs with considering what wealth you would like to pass on to the future family generations.

For many, the cost of living drops dramatically in this phase, assuming you don’t need full-time health care. However, if your health dictates that you need to be in an environment with care at hand, then costs will go up during this phase, often rapidly depleting your resources. Commonly this late stage requires some level of support from family, government and community agencies. It can be a time when assets have to be sold to fund healthcare requirements.

Being aware that costs can increase in this late stage of life means holding some of your resources back for use during these years. 


Read more on the "Why Planning Matters" page or call us on 03 470 1030.