The 4 Stages of Retirement

Actionable Ideas for Every Stage of Retirement and Life

When you think about retirement, how do you feel? Are you excited about having more time to do the things you love? Worried about making your income last? Unsure of where to begin? Or maybe all of the above? It may help to shift your thinking. Rather than viewing retirement as a one-time event or a single stage of life, think of it as an ongoing process. Whether you’re building your nest egg, transitioning from saving to spending, newly retired or well into retirement, there are smart things you can do to build financial security and enhance your well-being.

At Fisher Investments, we help our clients seize the opportunities—and avoid the pitfalls—at every stage of their retirement journey. Since our founding in 1979, we’ve worked with tens of thousands of successful individuals, families, businesses and institutions.¹ It is our privilege to help them achieve their dreams and feel more confident about the future. We’d like to do the same for you.

While everyone’s situation is different, we generally find most people fall into one of these four stages. Our goal is to meet you where you are and help empower you to get where you want to go. 

¹As of 09/30/2025. Fisher Investments and its subsidiaries serve over 190,000 clients globally.

Approaching Retirement

Make a Plan to Retire on Your Terms

If you, your spouse or both of you are still working when you read this guide, time is on your side. Even if you haven’t started actively planning for retirement, you can tackle important lifestyle and financial decisions right now. Getting started may seem intimidating, but it’s well worth it. Many of our retired clients tell us having been proactive in their later earning years put them in a better position in retirement.

Here are five steps you can take to feel more prepared for retirement:

1. Write your retirement story

Think about the first morning you wake up in retirement. Where are you living? How will you spend the day? Do you have any travel plans? What hobbies are you looking forward to pursuing?

By envisioning your ideal retirement, you can start to define your long-term goals. Most people’s main financial goal is to generate enough income to support them for the rest of their lives. But retirement planning should also consider your lifestyle goals because they will impact your expenses.

Consider whether you’ll want a second home, how often you’d like to travel, what it will cost to buy the boat you’ve always wanted or other aspirations. Do you envision helping to pay for your grandchildren’s education or taking the whole family on beach vacations? The life you’re hoping to attain can have material implications for your retirement plan.

Retirement also inevitably includes healthcare costs, which tend to go up over time. And you may want to support charitable causes or organizations that are meaningful to you. Finally, if you wish to leave a financial legacy to your family, that should be factored into your plan.

2. Plan for a decades-long retirement

For prior generations, retirement wasn’t a very long stage of life. Today, many people can expect to be retired for decades. As you save and invest for retirement, remember your money needs to last for the rest of your life, and it’s quite possible you could live longer than you expect. Planning for a long lifespan is a prudent way to protect against the risk of running out of money during your lifetime and suffering aged poverty. 

The table below illustrates average life expectancy based on current ages. The average 65-year-old may live nearly 20 years in retirement. But that’s just the average. If you’re in good health, a nonsmoker and without a family history of serious diseases, you might live to blow out 90 birthday candles—or more.

While you’re looking at these numbers, be sure to consider the concept of joint life expectancy. Your retirement time horizon should include the expected life span of both you and your spouse. If they are younger, then you’ll need to invest for an even longer time frame.

Exhibit 1: Average Life Expectancy²
 

² Source: Social Security Life Table (as of 03/15/2023), Period Life Table, 2019, as used in the 2022 Trustees Report. Life expectancy rounded to the nearest year.

Have you noticed how everything costs more these days? Or the cost stays the same, but the package gets smaller? Inflation can be volatile from year to year, but even at the long-term average inflation rate of 3%, prices likely will increase sharply during a 20- to 30-year retirement.³ And in a high-inflation environment such as the one we experienced after the COVID-19 pandemic, prices can go up even faster. 

It’s important to start preparing for the effect inflation can have on your buying power before you retire. In the short term, price increases may not be obvious. But they compound over time. As Exhibit 1 illustrates, at about a 3% inflation rate, $50,000 in annual living expenses today will require $90,000 in 20 years and almost $120,000 in 30 years—just to maintain the same purchasing power. 

Inflation is especially dangerous for retirees for two reasons: 

• The cost of their living expenses will increase over time.
• As people grow older, they tend to spend more, particularly once they start needing extra help or move to a retirement community. 

When planning for your retirement, don’t overlook the additional expenses you may face—including health insurance if you don’t yet qualify for Medicare, increased spending on leisure activities and taxes on distributions from your retirement accounts.
 

Exhibit 1: Inflation Has a Big Impact Over Time

4. Look to grow your wealth

Conventional wisdom often suggests shifting your investments from stocks to bonds in retirement. But with today’s longer lifespans, most people need to continue investing for growth throughout their lives. Your portfolio should be designed to pursue growth so you can account for inflation while providing a buffer for potentially increased spending. Investing for growth can also create an opportunity to leave money to heirs.