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Explore the Different Phases of Retirement Goals

24 January 20246 mins read by Angel One
Explore the Different Phases of Retirement Goals
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Retirement is a major financial milestone. It’s a stage that every working individual may go through, irrespective of whether they are salaried or self-employed. You, too, may already have a specific retirement age in mind. If you are a salaried professional, the retirement age is typically 60 years. Now, with the Financial Independence, Retire Early (FIRE) movement becoming popular, you may even be planning to retire sooner, by the age of 50 or so. On the other hand, if you are self-employed, you may be planning to retire once you have transferred the reins of your business to the next generation. 

Irrespective of the nature of your employment, you need to be aware of the different phases of retirement planning and the financial goals linked with each phase. This will help you streamline your financial planning and secure your retirement. 

The Three Key Phases of Retirement Goals

Retirement may happen when you are 50 or 60 years of age, but planning for this milestone must begin much earlier. Ideally, you need to start investing for your retirement when you begin earning, so you have ample time to tap into the power of compounding. This leads us to the first of the three phases of retirement goals. 

Phase 1: Pre-Retirement Goals

The pre-retirement phase precedes the actual retirement age. For instance, if you plan to retire at 60, your 50s, 40s, 30s and 20s all make up the pre-retirement stage. During these years, you must primarily focus on aggressively saving up for your retirement. Here are some strategies that can help you set and achieve your pre-retirement goals.

  • Start Early

Begin saving and investing your money as soon as you start earning. The earlier you start your investment journey, the more you can leverage the power of compounding and build a sizable corpus for your retirement.

  • Set Clear Financial Goals

Determine how much money you’ll need to live comfortably once you retire. Consider factors like living expenses, healthcare needs, any unaccomplished life goals and inflation. Your financial goals must encompass all these aspects.

  • Adopt a Regular Savings Plan

Make it a regular habit to save for your retirement. Dedicate a certain percentage of your income towards retirement savings each month. You can even automate these savings or investments so you are not tempted to spend before you save. 

  • Diversify Investments

In the pre-retirement phase, you have the freedom to invest in a variety of assets like stocks, bonds, mutual funds, and real estate to spread the overall risk. Diversification can help protect your portfolio from market volatility and add to the wealth creation process.

  • Maximise Retirement Accounts

Utilise retirement saving schemes or pension plans offered in India, like the Public Provident Fund (PPF), Employees’ Provident Fund (EPF), National Pension Scheme (NPS) and the like. These schemes also offer tax benefits, so you can lessen the tax burden and save more.

  • Monitor and Adjust Investments

Regularly review your investment portfolio and make adjustments as needed, especially as you get closer to retirement age. In your 20s and 30s, you can afford to take on more risks. However, as you get closer to the retirement age, you may need to be more conservative.

  • Debt Reduction

Aim to pay off high-interest debts such as credit card balances or loans. Entering retirement with minimal debt can significantly reduce financial stress and allow you to meet your post-retirement goals more easily. 

  • Emergency Fund

Maintain an emergency fund to cover unexpected expenses without dipping into retirement savings. If there is a medical emergency or an unexpected home repair required, you can rely on this safety net without using up your retirement corpus.

  • Healthcare Planning

Factor in the cost of healthcare as you age. You can rely on insurance products like life, health and long-term care insurance, which becomes increasingly important as you grow older. 

Phase 2: Retirement Planning

The retirement phase begins when you officially retire from active employment. This phase requires a shift in how you manage your finances as you move from accumulating assets to drawing upon them. Here are some key strategies that you need to adopt in this phase of retirement. 

  • Income Management

Develop a strategy to draw income from your retirement savings, pension plans and any other investments. It’s crucial to find a balance that ensures your money lasts throughout your retirement.

  • Budget Adjustment

Reassess your budget to reflect the changes in your income and expenses. Your budget may need to be adjusted to accommodate the fixed income from your investments and to account for the continued expenses even after you retire.

  • Investment Rebalancing

Shift your investment strategy to focus more on income generation and capital preservation. This might involve moving some of your assets into lower-risk investments so the corpus remains intact and generates the income required to meet post-retirement costs.

  • Focus on Healthcare 

As health becomes a more significant concern, it’s crucial to ensure that you have adequate healthcare coverage. This might involve purchasing supplemental insurance or setting aside additional funds for unforeseen medical expenses.

  • Estate Planning

In this phase, it’s also important to update your will and account for any investment rebalancing that you may have carried out. Consider setting up trusts or other estate planning tools to manage the distribution of your assets.

  • Phase 3: Post-Retirement Goals

The post-retirement phase is the later stage of retirement that occurs once you have settled into life after employment. It is often characterised by a slower pace of life. However, it remains crucial to manage your finances efficiently even in this phase so all the savings and investments you accumulated in the earlier phases are utilised adequately and optimally. These strategies can help. 

  • Conservative Investment Strategies

Shift to more conservative investments to protect your capital. This might include lower-risk bonds or fixed-income securities, which offer steady returns with less volatility. It ensures a steady stream of income while simultaneously safeguarding your corpus.

  • Managing Your Income Streams 

Focus on maintaining a steady stream of income to meet your post-retirement expenses. This could involve annuities or other financial products that provide regular payments. Your income planning must also account for the effect of inflation in the post-retirement phase.

  • Tax Planning

Be mindful of tax implications in this phase. Efficient tax planning can help maximise your disposable income and reduce the tax burden on withdrawals from retirement accounts so your net income remains high. 

  • Sustainable Withdrawals

Determine a sustainable withdrawal rate from your retirement savings to ensure your funds last throughout your post-retirement years. You can do this by identifying the optimal percentage of your savings that you can withdraw annually without depleting your principal.

  • Management of Living Expenses

Adjust your living expenses to align with your retirement income. This may involve downsizing your home, reducing discretionary spending, and finding ways to live more cost-effectively.

  • Regular Financial Reviews

Seek the help of a trusted financial advisor and conduct regular reviews of your financial situation. This ensures that your financial plan remains aligned with your changing financial needs and market conditions.


To effectively navigate the different phases of retirement, you need to focus on thoughtful planning and strategic financial management. The journey begins in the pre-retirement phase, where the focus is on aggressive saving and investment diversification. Thereafter, you move into the retirement phase, where income management and investment rebalancing take centre stage.

Then comes the post-retirement phase, where conserving capital and managing expenses is critical. Each stage presents unique challenges and opportunities. By adopting the strategies outlined above, you can ensure a comfortable and financially secure retirement where you make the most of your hard-earned savings and investments.

In case you are looking to invest in high-risk investments like equity to earn potentially attractive returns, open a demat account with Angel One today.

Disclaimer: The article is for educational purposes only. Investment in securities is subject to market risk. Read all related documents carefully before investing.


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