The Three Phases of Spending Money in Retirement

In retirement, there are three phases of how people spend their time and their money, and knowing them can help you better prepare yourself for retirement. 

Now, these three phases are different from the five stages of retirement that, because these three really span over all of your retirement years, 30 or 40 years.

Phase 1: The Go-Go Years

The first phase of retirement is called the go-go years. This is right after your retirement date and your first few years of retirement.  Usually, it’s in your 60s to your mid-70s.  You’re usually spending more,  traveling more, or maybe you’re taking up new hobbies that you always wanted to do, but didn’t have time for before. You may buy a second home or have improvements made to your current place. 

There’s a lot of activity happening in these early retirement years because you’re doing the things that you always wanted to do, but you couldn’t while you were working. So,  you’re probably spending more money at this time of your retirement than the other phases. 

Phase 2: The Slow-Go Years

The next phase is called the slow-go years – usually in your mid-70s. This is where you’ve done all the things you set out to do and accomplished the things you wanted to in the go-go years. 

Maybe you aren’t not traveling as much and you might be happier staying close to home and spending a little bit less money. 

This is the phase to really look forward to because this is where people tend to have a feeling of greater life satisfaction and contentment with life. It can be a really nice place to be. 

Phase 3: The No-Go-Years

The third phase is the no-go years –  usually in your 80s or upper 80s. This may be where health constraints start to limit the activity that you can do. In these slow-go years, the dollars are spent on more health and medical expenses than on travel or new experiences. 

So as you are building plans (or if you’re building your own retirement plan), you may want to take those phases into consideration as you’re modeling out expenses in your retirement plan. 

How to Plan for the Three Phases of Retirement

At Streamline Financial, we use a detailed planner for our clients who prefer to spend time doing other things than managing investments, taxes or their income plan. But for DIY’ers, a great planner is available to you. Click here to check it out. You can work out these different phases and changes in how expenses might look throughout your retirement years.

Disclaimer: Since we don’t know your specific situation, none of this information should be construed as tax, legal, financial, insurance, financial advice, or other advice and may be outdated or inaccurate. It is your responsibility to verify all information yourself. This content is prepared for entertainment purposes only. If you need advice, please contact a qualified CPA, attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. Streamline Financial Services, LLC or its members cannot be held liable for any use or misuse of this content.

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Disclosures: Securities offered through LaSalle St. Securities LLC (LSS), member FINRA/SIPC. Advisory services offered through LaSalle St. Investment Advisors LLC (LSIA), a Registered Investment Advisor. Streamline Financial Services is not affiliated with LSS or LSIA. LSS is affiliated with LSIA.