Broker Check

The 4 Stages of Retirement for Baby Boomers

| December 12, 2016

With millions of baby boomers departing the workforce, leisure time among retired Americans will increase dramatically. According to a new study from Merrill Lynch, more than a trillion hours of leisure time will be created among the 65-and-older population over the next two decades.

The study found that many boomers are experiencing that new leisure time in similar ways. As boomers transition into their non-working years, experts say, they often go through four distinct phases: 

Winding Down & Gearing Up: In the five years prior to retirement, the study found, pre-retirees often feel overwhelmed with work and are looking forward to fitting more non-work activities into their lives. At this stage, many said they felt worn out and lonely, and 74 percent said work was a barrier for them to having more fulfilling leisure time.

Liberation and Self Discovery: This stage usually occurs among retirees who have been out of the workforce less than two years. It’s marked by an enormous sense of liberation and relief. Among those surveyed, 78 percent said they finally feel they have enough free time, and 92 percent said retirement gives them the freedom to do what they want. However, some struggle with the unstructured time and may feel unsettled, anxious, or bored.

Greater Freedom and New Choices: For those who are three to 15 years into retirement, most reported embracing their new identity and had high levels of happiness, contentment, and confidence. Spontaneity is at its highest during this period.

Contentment and Accommodation: In the fourth stage of retirement—about 15 years after leaving work—retirees said they were striving to maintain their health and independence while also enjoying activities, both new and old. At this stage, the emphasis is on simplifying their lives.

While most boomers in the study reported high levels of happiness during retirement, a few (7 percent) found retirement to be less fun, and this was typically due to financial concerns. Putting a financial plan in place beforehand can help alleviate some of those concerns, however, and make retirement more enjoyable.