CFP Dana Anspach says the key to a great retirement isn't what you do after you stop working. It's what you do before.
Most of us spend our working years with our eyes fixed on one thing: retirement. We save, we invest, we max out our 401(k)s, and we dream about what’s waiting on the other side. But according to Dana Anspach, CFP and founder of Sensible Money, that finish line thinking might actually be holding us back.
Dana Anspach joined the HerMoney podcast this week to discuss her new book, Living Off Your Acorns: Your Guide to the Four Phases of Retirement, and why a great retirement is built in the years leading up to retirement rather than the day you leave work.
The Four Phases of Retirement
You may already be familiar with the Go-Go years, those early, active retirement years when you’re traveling, checking off the bucket list, and spending more than you expected. Or the Slow-Go years, when life starts to shift, and healthcare decisions begin to take center stage. Or even the No-Go years, when the focus turns to legacy and making sure everything is in order.
But Anspach argues there’s a fourth phase that most financial experts never talk about, and it might be the most important one of all. She calls it the Pre-Go phase.
“This is where you set the foundation, like the foundation of a house. You have to get the plans right before you start building,” Anspach said.
The Pre-Go phase typically begins about 10 years before you plan to retire, though Anspach is quick to note it looks different for everyone. “I have seen people who didn’t think about retirement until one day they woke up and said, ‘Oh my gosh, I’m 65, and I’m going to retire,'” she said. “And then there are people who start planning much earlier.”
The Sobering Numbers And How to Get Ahead of Them
When it comes to actually funding a retirement, the numbers can feel daunting. A recent GOBankingRates report found that the average retiree will burn through $1 million in less than 20 years, in every single state. And a new Investopedia analysis found that 43% of Americans between the ages of 55 and 64 have no retirement savings at all, with a median balance of just $185,000 among those who do.
For Anspach, the answer is planning. “I think of a financial plan like a movie,” she said. “A net worth statement is like a photograph, a snapshot in time. But a good retirement planning projection shows you how things will play out over time, and you have to recast that movie every year.”
For those who feel behind, she points to a handful of levers: adjusting spending expectations, considering downsizing, exploring lower cost-of-living locations, and — when possible — working a little longer to delay drawing down assets.
Your Retirement Journey: The One Thing to Remember
Wherever you are on the retirement journey — deep in your Pre-Go years, living your Go-Go years, or somewhere further along — Anspach’s message is the same.
“It’s all going to be okay,” she said. “If you do the planning, that helps with the anxiety. But regardless of how much planning you do, there’s a certain component of anxiety that’s natural, so give yourself some grace. This is a major life transition. Allow those emotions to play out, but don’t get caught up in them.”
MORE ON HERMONEY:
- How to Save for Retirement: A Historian’s Advice Based on 300 Years of Research
- Ask Jean: “Should I Buy Used Luxury Items?”
- You’re Already Behind – And It’s Not Your Fault: Closing The Retirement Gender Gap
And if you’re thinking about how to build income that lasts, check out Jean’s new book, The Forever Paycheck — your guide to creating a secure, steady income stream so you can actually enjoy the retirement you’ve worked so hard for.
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