Retirement: The 'Endeavour' stage

From 75 to 85, life starts to slow down for most retirees as the excitement of having so much free time wanes. Life starts falling into patterns and the excitement of retirement transitions to more of a daily routine. Routines such as seeing family at home on Sundays, groceries on Tuesdays, friends on Friday, etc. Part of the reason for these patterns is that energy levels are changing and patterns help minimise effort and thought without compromising on the enjoyment of life. 

The middle years of retirement are more about consolidation, a time to choose fun things, develop old skills, explore fresh talents and grow new friendships. The need to travel or just the hassle of travelling is less exciting and your focus is more on the simple things in life. Getting the family to come and visit you, thinking about perhaps downsizing the house and moving to something smaller with less maintenance. Sometimes your body is telling you to slow down a little.

The older you get, the more important it is to find routines and patterns that give you comfort and security. Maintaining regular activity, though, is important as well, but it might just mean you need to slow it down a little!

The middle stage of retirement doesn’t mean an end to the hobbies that you have enjoyed in the first phase, it’s just not at such a frenzied pace. Many are still pursuing their hobbies and travelling but at a slower pace, which means steady costs. Ideally, in this stage, health-care costs have been planned because sometimes health issues prompt unexpected spending on health services.

The cost of living typically plateaus in this period, but you may be considering downsizing your home or thinking about the benefits of retirement villages. Releasing the equity tied up in the family home sometimes becomes a necessity as you may find yourself asset rich but cash poor. So, downsizing can become a real option during the second phase, particularly if you have no money saved for health care or if all your money is tied up in assets.  

A good idea at this stage is to periodically review your spending plan to ensure you’ve captured all your costs, including taxes and the effects of inflation. Cash flow is still important and expenses may still be close to the level it was during the discovery phase. Not having spare cash makes it harder to maintain the house and find money for the enjoyable things in life, like pampering the grandkids or going on another trip. At this point, you want your money to continue to grow, but preservation is becoming more important, which means you may want to be more conservative with your investments, and move toward income stocks, and away from growth stocks. During the second phase of retirement, it’s not the time to invest in risky high-flying growth stocks or real-estate deals you heard about on the golf course.