A research group from MIT called “The AgeLab” divides the average human life cycle into four different stages. The first three are the learning, growing, and maturing phases. Interestingly, they call the retirement stage the “exploring” stage. This stage lasts 8000 days. That means we have 8000 days of exploring ahead of us. To break things down even further, we can look at retirement in four stages.
1. The Honeymoon Phase
2. The Big Decision Phase
3. The Navigating Longevity Phase
4. The Solo Journey Phase
Some of us might wonder what we will do with all those days. And some of us might wonder if we can successfully meet our goals in 8000 days. Like any great life change, we look at them using financial and behavioral economics. Or rather, we must consider the economical and emotional impact that each phase poses on our lives.
Every transition begins with a “honeymoon phase.” If you have planned well, then the honeymoon phase is everything you ever dreamed your retirement would be like. You are in good health and you have time to spend with friends and family. But eventually the shine wears off the apple. Just because your retirement is off to a great start doesn’t mean you won’t come across some emotions that can impact your life.
Things are changing rapidly - adjusting to your new normal can be stressful. You are questioning your place and your relevance in your post-career. Take time to reassess your goals and what you want your retirement to look like. As we age, our Wants and Needs shift, and that’s okay, just make sure your plan shifts alongside too.
There are also economic considerations that impact the honeymoon phase. You have worked and saved. Now it’s time to enjoy yourself. But you’d be surprised how some people struggle shifting to a spending mentality from a saving mentality. And while it might be tempting to start your retirement with a bang, remember that this money should last for roughly 8000 days, so don’t blow it all in one place. Are you considering the cost of health care? What about leaving behind a legacy? Pace yourself on this first stage of your exploration, and map out what you want so you can create a plan to help you get it.
After the shine has faded, you may come across some big decisions in your retirement. Big decisions come with a big emotional and economic impact. We will discuss this next month.
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