Have you ever wondered what the person who called retirement “the golden years” was truly thinking? Well interestingly enough the term “golden years” was coined in 1959 by the builder Dell Webb and his company with the idea that retirement is the time in your life for leisure. As this term is still utilized today, almost 65 years later, your golden years are said to begin at age 65 and last until age 80.
Back in 1959, a typical retirement would last maybe a decade or so. Therefore your “golden years” might have lasted 10 or 15 years. However, we are living longer today than they did back in 1960 and a typical retirement can now last up to 30 years. So instead of simply calling retirement your “golden years”, I believe retirement needs to be broken down into 3 stages. These stages of retirement are:
- Your “Go-Go” years
- Your “Slow-Go” years
- Your “No-Go” years
Let’s start with your “Go-Go” years. These are your prime retirement years. These are the years when you are physically able to still do all of the things you enjoy doing. These are the years that you are not only physically able to do these activities, but you have the energy and the drive to do them as well. This is the stage when you might consider checking off some items from your bucket list which you have not gotten to yet. These are the years that you might travel to some of the places you have never been able to visit yet either in the US or out of the country. Travel can be a very large focus for many people during these years, especially for people who never had the chance to travel during their working years. These are the years that you have worked so hard for that truly allow you to live your best retirement! These are your “golden years”!
Next, we have your “slow-go” years. This is the phase when you start to physically get more tired and lose the energy and drive to do the things you used to enjoy doing. Whether that be travel, ski, bike, fish, play tennis, golf, or whatever. You start to do these activities less often and you ultimately lose the burning desire to wake up and go. This is in part due to not having as much energy, but it can also be because your body simply cannot keep up the way it used to. This tends to be a time in life when you reflect on your past and you become more selective with what you do, who you do it with, how often you do it and if you do it at all anymore. Travel is mostly around visiting family and friends and some even call a trip to Costco traveling during these years. This is truly when you start to slow down.
The last stage of retirement is your “no-go” years. These are the years when you start to just sit in the lazy boy chair or recliner and read or watch TV. This is when you fall asleep during the day and wake up in the middle of the night and cannot go back to sleep. This is the phase when all you talk about are your ailments and your will. You compare stories with your friends about your doctor’s visits and weird diagnoses that you had never heard of previously. You start to recall friends who are no longer around and who have passed away. You might call family to say hi and ask what is new with them but when you call you given them guilt for not calling you enough or visiting you enough. You forget what it was like when you were younger and more active and did not have time to sit on the couch with nothing to do. Travel during this phase of life is typically discussed in terms of trips to your different doctor’s appointments and various treatments. This is also the stage in life when you realize that you are not going to live forever, and you likely don’t want to live forever.
So why must we understand these 3 stages of retirement? The reason is because if you want to achieve the best retirement possible, you need to come up with a plan so you can live your best life each during regardless of the stage, while still planning for tomorrow. This is a very challenging task when you do not know how long you will live and therefore you do not know how much money you need to save for the future. That is why it is so important to work with a financial planner who can help you to plan, save, and budget for your future. This is also why it is important to create different buckets of money that you can access in retirement which are pre-tax, tax deferred and tax free asset classes. Each one of these buckets of money has a place in retirement planning but must be properly managed so that they can be utilized at the best possible time to produce the best possible outcome for you. One of the most powerful and underutilized assets in retirement is home equity. Home equity can be accessed free of any income taxes and is therefore one of the most efficient buckets of money that you can get your hands on.
