Exploring the Four Phases of Retirement
Massachusetts Institute of Technology (MIT) established the AgeLab in 1999 as a multidisciplinary research program that works with businesses to improve the quality of life for older people and those who care for them. The AgeLab applies consumer-centered thinking to the challenges and opportunities of longevity. Their insights are critical for anyone nearing retirement, or who has a loved one entering this stage of life.
Retiring today is much different than it was just a generation or two ago. People live longer and many have accumulated significant wealth along the way that they need to protect and manage for the long term. Wealth from self directed retirement plans like 401(k) and 403(b) plans in addition to traditional cash and investment savings. Combine these factors and we no longer call the post career working years “retirement”, rather we call this your “Exploring” years. Baby Boomers will be the first generation in the history of the world to have a 20+ year period where they live without the constraints of working to survive.
MIT’s AgeLab suggests that there are four distinct phases that people experience as they live through their “Exploring” years.
The “Exploring” phase – what we used to call retirement – is a peak time for happiness in most people’s lives.
The first of these is the “Honeymoon” phase, named because it marks the period of time when this whole idea of exploring our freedom is brand new to us. But, there are also a number of adjustments that must be made as we acclimate to the changes in our lives.
The second stage is called the “Big Decision” phase because this is a time when we are faced with very important decisions that may impact our quality of life for the rest of our lives, and in particular, decisions about where we will live.
The third stage, known as “Managing Longevity” phase, is when managing the complexities of life become more challenging.
The final stage is the “Solo Journey” phase, referring to the period of time after one spouse passes away and the other is left to live the remainder of their years alone.
So When Do We Actually Reach Peak Happiness?
The four phases of the “Exploring years” – the “Honeymoon” phase, the “Big Decision” phase, the “Managing Longevity” phase, and the “Solo Journey” phase – are meant to show that life after age 65 can be exciting, complex, and sometimes overwhelming, but that it is certainly not the end. Despite the challenges and complexities, the “Exploring” period can be a wonderful time of freedom, enjoyment, and satisfaction.
In 2017, Business Insider conducted a study to identify the ages at which we peak at everything in life. The results were amusing, but they also demonstrate some interesting facts about life satisfaction and overall well-being.
Our “Life Satisfaction” peaks at 23, but then it peaks again at 69. As we near 70, we may think of the aging process as depressing because life is passing us by, but we are actually at peak satisfaction. This is probably due to the onset of the “Exploring” phase of our lives. We are excited to have more time and resources, and fewer responsibilities, to truly enjoy life on our own.
Following that, our “Psychological Well Being” peaks at age 82. Although we may anticipate it to be a difficult period of time when we are dealing with the realities of health concerns and our mortality, we’re also very likely to feel content. This is probably because we can sit back and reflect on our accomplishments, the lessons we have learned, and the experiences we have enjoyed.
Despite the challenges and issues we must face as we grow older, the good news is that it’s also a time when we have the freedom to enjoy a purposeful lifestyle and the opportunity to maximize our happiness, satisfaction, and well-being. Being prepared for the four stages – the “Honeymoon” phase, the “Big Decision” phase, the “Managing Longevity” phase, and the “Solo Journey” phase – will help you design your own life-path, so that you can grow older with the maximum amount of happiness, dignity, and independence.
About The Author
Erik Strid, CFP®, ChFC
Founding Principal and CEO
Erik is one of the co-founders of Concentus Wealth Advisors and currently serves as the Chief Executive Officer of the firm. With over 25 years of industry experience, Erik guides the firm’s overall strategy.
Erik’s career in the financial services industry is based on two key principles: putting the client’s interests first and providing exceptional personal service. Through the personalized service that has become Erik’s trademark, he takes the time to prepare and educate our clients so that they feel more confident with each decision they make.