Most people don’t realize how vital proper retirement phase planning really is. A healthy 65-year-old couple who retires today will likely spend nearly 70% of their lifetime Social Security benefits on medical costs alone. Your financial planner in Fresno CA understands that this eye-opening fact shows why standard retirement planning doesn’t cut it anymore.

The common belief suggests we need 70% to 80% of our pre-retirement income to live comfortably after retiring. This basic rule of thumb fails to address retirement’s complex phases. The retirement journey extends far beyond what many expect. Today’s 65-year-old might need enough savings to last 35 years, particularly for non-smokers with excellent health. The workforce landscape keeps evolving too. By 2032, 21 percent of older adults will still work, which challenges our traditional views about when to retire.

Why the Three Phases of Retirement Are Often Misunderstood

People planning their retirement years often misunderstand the three retirement phases—”go-go, slow-go, and no-go” years. Retirees don’t think about how their spending changes through these distinct stages.

The early “go-go years” see retirees in good health who actively chase their dreams—they travel, learn new skills, and sometimes start businesses. This stage needs the most watchfulness because unrestricted spending can steal from your future quietly.

Most retirees believe their expenses will naturally drop when they enter their “slow-go years.” In spite of that, healthcare costs start rising even as lifestyle spending decreases. The danger lies in how people underestimate these medical expenses. More than half of pre-retirees lack confidence about knowing how to cover their healthcare costs as they age.

Common Mistakes People Make in Each Retirement Phase

Retirement mistakes can wreck even your best-laid plans. You need to spot these pitfalls to protect your financial future at every stage of retirement.

Many people rush to claim their Social Security benefits too early in retirement. This mistake can cost them up to 30% less than if they waited until full retirement age. On top of that, retiring before 65 means you’ll pay nowhere near what you expected for healthcare. A healthy couple might shell out over $18,000 each year before Medicare kicks in. Private insurance can add another $50,000+ in expenses that catch many people off guard.

How to Get Retirement Phases Right

Managing retirement phases needs a strategic mix of diversification, guaranteed income, and flexible planning. You should create a diverse portfolio of income streams to protect against inflation, market volatility, and longevity risks.

During retirement, combine:

Guaranteed lifetime income (Social Security, annuities)

Growth investments to outpace inflation

Flexible assets for changing circumstances

The “bucket approach” provides a practical framework that divides assets into three time-based categories. Your immediate needs bucket should contain 1-5 years of expenses in cash equivalents. Intermediate and long-term buckets balance growth potential with appropriate risk levels.

Covering daily expenses with guaranteed income sources is crucial. Fixed indexed annuities and indexed universal life insurance work well with traditional investments. This strategy has shown 5.5% higher retirement income and 29.6% greater legacy value than investment-only approaches.

Conclusion

We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to see how we can help you Retire ”Your Way!”

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Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser. The commentary on this website reflects the personal opinions, viewpoints, and analyses of the author, Soutas Financial, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security, or any security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Foundations deems reliable any statistical data or information obtained from or prepared by third party sources that is included in any commentary, but in no way guarantees its accuracy or completeness.

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