There are basically five stages of retirement. Each has its own unique challenges, so it’s important to understand those challenges and prepare for them. Let’s examine each one.

1. The Growth and Accumulation Stage

This stage begins as soon as you join the workforce, typically in your 20s. Ideally, that’s when you should begin investing a portion of your paycheck each week with the goal of growing a nest egg large enough to retire on. Yet, for a variety of reasons, many people don’t start saving until their 30s or 40s or even later, and some don’t save specifically for retirement at all.

To maximize this stage, it’s best to start saving as much and as early as possible. The sooner you start, the more aggressive you can be in your investment strategies. You can afford to take more risks because you have the luxury of time to make up for a potential loss due to market conditions. You steadily lose that luxury as you get older.

2. The Transitional Stage (a.k.a. Pre-retirement)

This occurs roughly in the decade just before you retire and is still part of the growth and accumulation stage. So, if you’re behind on saving, one of your goals during this stage should be to make up for lost time.

In addition, the transitional stage is when you should identify your specific retirement goals. This is when most people realize their goals are income-based. In other words, they have lifestyle-based goals they want to be able to pay for from their regular income stream, things like traveling, spending time with family, and enjoying their favorite pastimes.

If you discover your own goals are income-based, chances are you will also start to understand the importance of shifting your investment focus from portfolio growth to retirement income. If so, be aware that the transitional stage is the best time to start making this shift. Doing so now can help ensure your assets are allocated in a way that generates sufficient income and can allow you to continue growing them with less risk. A financial advisor who specializes in retirement income can explain how and help you make this all-important shift.

3. Early Retirement

Generally, the period from your last day of work until you hit your early 70s is considered early retirement. This is often the most enjoyable stage for several reasons, but it can also be the most dangerous. That’s because you’re still relatively young and healthy enough to enjoy your most highly anticipated goals. But many people get so caught up in enjoying this stage that they lose sight of the need to continue preparing for the next two stages.

How can you avoid these risks? First, have a budget and stick to it. Second, work closely with your advisor during this period to make sure your income strategy remains aligned with your needs and goals.

4. Mid-retirement

This starts in your early 70s and extends to however long you’re able to live independently. This period can be vastly different for different people, but there are several important issues you need to actively address now. The first is your required minimum distributions (RMDs), which start at age 73. Having a financial strategy that allows you to satisfy your RMDs without running the risk of spending down your principal is crucial.

Now is when you want to revisit your estate plan to make sure it’s still right for your needs and goals. This stage is also when you want to make certain you’re financially prepared for the potential need for long-term care. Mid-retirement is the right time to begin having honest conversations with your family members about your wishes and priorities if your health should decline in late retirement.

5. Late Retirement

The good news about this stage is that if you’ve prepared and managed your affairs well during the preceding stages of retirement, you won’t need to do much more in late retirement. The people you’ve entrusted to take over will do it for you. You can rest easy knowing your finances are in good order, you still have reliable income, and that your wishes for yourself and your assets are spelled out clearly and will be honored.