A Closer Look at the Go-Go Phase of Retirement: Celebration or Fear?

For those of you looking enviously to retirement, it certainly can be a life imagined – where one leaves the daily grind— no appointments to keep or deadlines to meet and demands on one’s time are few and far between. It’s time for them to slow down, kick back and fill all the idle time with their heart’s desire. But today, Boomers and Seniors are staying healthy and living longer – which is great news.  This means one could realistically spend 30 or more years in retirement and needs the financial means to do so. Although it is easy to conclude  each day in retirement is just like the next, in reality it’s not. Author, Michael K. Stein in his book, “The Prosperous Retirement: Guide to the New Reality”, wrote  there are three distinct phases of retirement and aptly named them:  the “GO GO Phase”, “SLOW GO Phase” and the “NO GO Phase”.  These catchy labels  contrast how the behavior of today’s retirees differ from  preceding generations.  Each of these phases has its own financial implications and impact upon overall retirement planning.

Boomers and Seniors have enjoyed economic prosperity and social freedoms growing up in post-World War II America. They’ve attained a standard of living and a lifestyle they are now unwilling to compromise. Why? During the 70’s, another author Tom Wolfe coined the phrase the “Me Generation” to describe the narcissism of those who would later be called “Baby Boomers”. This “self-indulgence”, coupled with good health and a full “bucket list” has given rise to the “Go Go Phase” of retirement. Thus, the “Go Go Phase” includes all manner of activities that were always planned but postponed while being tied to a job and a growing family. This includes: entertaining, new hobbies and travel but it may also mean going back to school or starting a new career. These life enriching activities come at a cost to their “nest egg”.

Many Boomers and Seniors I counsel fail to grasp what it will take to have a “successful retirement”. By “successful retirement” I mean one that is free from the stress and worry about out-living their money. It is clear people will spend more in the “Go Go Phase” perhaps more than when they were drawing a paycheck. Unfortunately, what further exacerbates the situation is the “Go Go Phase” comes early in retirement and therefore withdrawals from the “nest egg” has an extreme impact over the long term. It’s not just a dollar spent today, but it comes at the cost of what that dollar will have earned if left invested for ten or twenty years. So it’s great for Boomers and Seniors to make the most of the “Go Go Phase” of their retirement, but excessive spending without a great deal of prior planning will prove to be unwise – if not disastrous.