The Passive Phase of Retirement: The “Slow-Go” Phase

As described in the previous Blog Post, retirement typically goes through three phases, the “slow-go” phase  marks the second of these. Mr. Stein, the author of the book “The Prosperous Retirement: Guide to the New Reality: wrote “The “go-go” phase of retirement gives way to the “slow-go” phase.  After some years of active retirement, people begin to grow weary of long vacations, feel less than enthusiastic about running through airports and train stations, grow tired of living out of suitcases on trips, and in general, decide to let the pace of their lives slow down. This is the beginning of the passive phase of retirement.

The transition from active retirement to passive retirement generally begins when retirees reach the mid-70s and it lasts for about 10 years.

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Sometimes people feel like traveling and being active well into their 80s. Sometimes deteriorating health causes people to slow down before they reach their 70s. Typically though, most people are able to be about as active as they want until their 70s, then, inexorably, old age creeps up on us and we slip quietly, without trauma, into the passive phase of retirement.”

It is easily understood, with less activity, consumption is reduced – fewer trips are taken, new car purchases are spread out or eliminated, and retirees may also downsize their primary residence. With this more conservative life-style the average retirement budget declines by about 20 to 30% during this period. It must be noted these numbers are generalizations and do not contemplate the effects of inflation or unforeseen “budget shocks” such as  an illness or the need to take expensive medications. Therefore, spending during this more passive phase may be higher than budgeted which illustrates why retirement planning is so difficult.  Especially in its later years of the “Slow-go” phase concerns of health, both mental and physical, become of paramount importance not only because of their impact on the quality of life but on the retirement “nest egg”. Without having set aside enough funds for this eventuality or tapping one’s home equity through a means such as a Home Equity Conversion Mortgage Line of Credit retirement can take a very ugly turn from the active “go-go” phase.