Psychological Stages of Retirement

As retirement age approaches, many people will begin wondering what challenges and benefits will come with this new phase of life. Although it is impossible to exactly predict what will happen, most people in this phase of life will experience at least six different psychological stages that most people in this phase of life will experience.

Stage 1 -- Imagination or Planning Time

• This stage is usually experienced six to 15 years before reaching retirement age. It is in this stage where the person starts preparing for the future by increasing the amount of money saved. However, not knowing exactly how much money will be needed can cause feelings of apprehension and unpreparedness.

Stage 2 -- Hesitation

• During this second stage (about three to five years before retirement), the person starts to see retirement as unavoidable. However, depending on the economic situation, this could be a very stressful stage, especially if the person is unsure how the retirement path will unfold. Many seek help and advice during this stage.

Stage 3 - Anticipation

• This stage, occurring up to two years before retirement, is characterized by the feeling of excitement. The person that is on this stage feels "on track" toward a good retirement. More than half the people on this stage are being helped by a financial advisor.

Stage 4 -- Realization

• Realization happens on the retirement day and the first year following it. In 2005, this stage was called "Liberation" because it was in this stage where people started to finally feel free. However, in more recent times, economic conditions have caused many at this stage to to feel worried about having enough money to make it through.

Stage 5 -- Reorientation

• In this stage, that could last anywhere from the 2nd-to-15th year after retirement, the person starts to look for a "new identity". Goals and expectations of life become adjusted to fit a new reality. Those working with a financial advisor, or those who have enough money set aside for retirement, are usually more confident in this stage.

Stage 6 -- Reconciliation

• The Reconciliation stage usually happens 16 or more years after retirement. Concerns with illnesses and physical needs start to increase. Although most people will continue to feel happy, feelings of anxiety and depression can start to show.