A retirement plan is a lifelong journey that unfolds in various phases. Here, we are going to explore the three major phases of a retirement plan, with each requiring a distinct focus, mindset, and set of tools.
Let’s dig into them…
𝟏. 𝐏𝐫𝐞 𝐑𝐞𝐭𝐢𝐫𝐞𝐦𝐞𝐧𝐭 𝐏𝐡𝐚𝐬𝐞
I refer to this phase as an Accumulation & Transition phase. This is the wealth-building and preparation stage, covering your active working years. The goal is to accumulate assets, manage debt wisely, and prepare for the transition into financial independence.
As you approach retirement (typically 5–10 years before), the focus begins to shift from aggressive growth to wealth preservation and transition readiness.
Unfortunately many still find themselves in the aggressive phase right into retirement or even after retirement
𝐊𝐞𝐲 𝐎𝐛𝐣𝐞𝐜𝐭𝐢𝐯𝐞𝐬:
In this phase, one needs to focus on;
- Building savings and investment portfolios
- Paying down high-interest debts
- Estimate retirement income needs and lifestyle costs
- Reduce exposure to high-risk assets as retirement nears
These activities don’t have to flow simultaneously as suggested above but worked up on with a system that fits you as an individual
𝐑𝐞𝐜𝐨𝐦𝐦𝐞𝐧𝐝𝐞𝐝 𝐓𝐨𝐨𝐥𝐬:
- Retirement calculators to project future income needs
- Investment accounts (e.g., mutual funds, pension plans, SACCOs, unit trusts)
- Debt payoff planners if you fancy them
- Insurance and emergency funds for risk protection
- Financial planning software or spreadsheets to track progress
𝟐. 𝐑𝐞𝐭𝐢𝐫𝐞𝐦𝐞𝐧𝐭 𝐏𝐡𝐚𝐬𝐞
In this retirement phase we look at the Lifestyle Transition & Income Management activities. This marks the shift from earning to spending where your financial plan is put to the real test. The main focus here is planning and managing withdrawals, ensuring steady income, and adjusting lifestyle choices for long-term sustainability.
The early years of retirement often involve fine-tuning your income plan, managing healthcare costs, and staying mentally and socially active.
𝐊𝐞𝐲 𝐎𝐛𝐣𝐞𝐜𝐭𝐢𝐯𝐞𝐬:
- Transition from savings to reliable income streams
- Control withdrawals to avoid depleting savings too early
- Plan for taxes, healthcare, and inflation
- Maintain a balanced lifestyle and social engagement
𝐑𝐞𝐜𝐨𝐦𝐦𝐞𝐧𝐝𝐞𝐝 𝐓𝐨𝐨𝐥𝐬:
- Income drawdown plans or annuity calculators
- Tax and expense trackers
- Healthcare and long-term care insurance
- Budgeting and cash flow management tools
- Financial advisor check-ins for periodic plan reviews
𝟑. 𝐏𝐨𝐬𝐭 𝐑𝐞𝐭𝐢𝐫𝐞𝐦𝐞𝐧𝐭 𝐏𝐡𝐚𝐬𝐞 (𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧 & 𝐋𝐞𝐠𝐚𝐜𝐲 𝐏𝐥𝐚𝐧𝐧𝐢𝐧𝐠)
This final retirement phase focuses on sustaining comfort, managing longevity risks, and leaving a meaningful legacy. The goal is to ensure that your resources last through your lifetime — and that the wealth you’ve built is transferred efficiently to your beneficiaries or causes you value.
𝐊𝐞𝐲 𝐎𝐛𝐣𝐞𝐜𝐭𝐢𝐯𝐞𝐬:
- Manage systematic withdrawals carefully
- Secure income sources against inflation and market volatility
- Simplify finances for convenience and peace of mind
- Establish estate, will, or trust plans
Read More: How greed ruins investors’ chances of making money from stocks – Namsia
𝐑𝐞𝐜𝐨𝐦𝐦𝐞𝐧𝐝𝐞𝐝 𝐓𝐨𝐨𝐥𝐬:
- Estate planning documents (Will, Trust, Power of attorney)
- Beneficiary management tools through banks or pension providers
- Healthcare directives and insurance plans
- Wealth transfer and inheritance structure
- Philanthropy and giving plans (if applicable)
- A good retirement plan and the actual retirement don’t happen by chance; but by design.
Start where you are, plan intentionally, and take control of your financial future today. The above is just a retirement plan blueprint. Everyone has a different path, lifestyle, needs etc.
Rhina Namsia is the founder and chief executive officer of The Acemt Consulting, a training and consultation company that provides financial planning and investment advisory.
