The 6 Stages of Retirement: What To Expect and How To Prepare

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Retirement isn’t just a finish line; it’s a journey with clear stages. From the years of saving and planning to the thrill of your last day on the job and eventually settling into a steady routine, each stage brings unique challenges and emotions.

Knowing the stages of retirement helps you prepare financially and emotionally so you can avoid surprises and actually enjoy this next chapter.

Below, we’ll walk through the six key phases, what to expect and how to make the most of each.

Stage 1: Pre-Retirement (The Planning Years)

This is where the groundwork is laid. In your 50s and early 60s, retirement feels close enough to picture but still far enough to prepare for.

Key Steps in Pre-Retirement

• Maximize savings: After age 50, you can make catch-up contributions — an extra $1,000 per year to an IRA and $7,500 to a 401(k).
• Choose your retirement age: Consider:
  • Do I have enough liquid savings for emergencies?
  • When should I claim Social Security?
  • How will I cover healthcare before Medicare at 65?
• Estimate expenses: Plan for housing, healthcare, food, insurance, transportation and hobbies.

Rule of thumb: Per the Social Security Administration, you should plan to replace 70% to 80% of your pre-retirement income to maintain your lifestyle.

Fact Check: Despite this, only 31% of workers feel very confident they’ll have enough saved for retirement, according to the 2024 Employee Benefit Research Institute survey. That’s why planning in this stage is so important.

Emotional Check-In: Excitement mixes with worry here. If anxiety is creeping in, it may be time to review your portfolio with a financial advisor.

Stage 2: The Big Day (Retirement Decision)

You’ve submitted your retirement notice. The “big day” marks the formal shift from earning money to living off savings and income streams.

Must-Do Financial Moves

• Apply for Social Security: You can claim as early as 62, but waiting until full retirement age (or 70) increases your benefit.
• Enroll in Medicare: Coverage begins three months before your 65th birthday.
• Decide on pension or 401(k) withdrawals:
  • Lump sum = more control but higher risk.
  • Monthly payouts = stability but less flexibility.
• Build a monthly budget: Add up reliable income (Social Security, pensions, annuities, RMDs) and compare against essential and discretionary expenses.

Fact Check: The average monthly Social Security benefit was $1,915 in 2024 (SSA). Knowing this number helps you see if you’ll need additional income sources.

Emotional Check-In: Relief and pride often come with uncertainty. Celebrate, but also double-check your health coverage and income plan.

Stage 3: Honeymoon Phase

The first year or two can feel like a never-ending vacation. You finally have time for travel, family, hobbies and rest.

Fact Check: According to Pew Research, 83% of recent retirees say they feel satisfied with life during their first years out of work.

Emotional Check-In: It’s exciting, but be cautious. This stage carries the highest risk of overspending, especially if you splurge on travel and leisure right away.

Stage 4: Disenchantment

The vacation feeling doesn’t last forever. Some retirees hit a wall when daily life starts to feel routine. Without work, structure or social interaction, boredom and loneliness can creep in.

How To Cope With Disenchantment

• Volunteer: Build connections while giving back.
• Pursue new learning: Classes, hobbies or even part-time work can provide purpose.
• Join community groups: Social engagement boosts well-being.

Fact Check: A National Institute on Aging study found that retirees without social connections have a 29% higher risk of early mortality. Staying engaged isn’t just fun, it’s vital.

Stage 5: Reorientation

Here, you regain balance. You’ve adjusted to retirement and now ask: “What’s my purpose?”

Smart Moves in This Stage

• Set mini-goals: Example: exercise three days a week, meet two friends weekly and commit time to hobbies.
• Track spending: Make sure withdrawals from savings align with your plan.
• Establish purpose: Mentorship, volunteering, and creative work can add structure and meaning.

Emotional Check-In: Confidence often returns here. Instead of seeing retirement as a loss of work identity, you’ll view it as a chance to live with intention.

Stage 6: Retirement Stability

Finally, retirement feels steady. You’ve settled into routines, know your healthcare needs and understand your monthly budget.

What Stability Looks Like

• Predictable healthcare costs through Medicare and supplements.
• A reliable budget that covers both essentials and extras.
• Stronger family connections and legacy planning.

Fact Check: Pew Research reports that 76% of retirees describe themselves as at least “doing okay” financially, with the most comfortable retirees citing strong pensions or annuities.

Emotional Check-In: Many find peace of mind in this stage. With finances under control, focus often shifts to family, health and legacy.

Final Take to GO

Retirement isn’t one moment; it’s six distinct stages, each with its own emotions and financial demands. By understanding the stages of retirement, you can plan for both the numbers and the feelings that come with each chapter.

The key is flexibility: adjust as your needs and priorities evolve. With the right planning and mindset, you can enjoy retirement not just as an ending, but as one of the most rewarding phases of your life.

Ready to get started? Check out our guide on how to plan for retirement in your 50s or explore smart ways to use home equity to build wealth.

Information is accurate as of Aug. 19, 2025.

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