These three phases define modern retirement. Which one are you in?

We used to think about life in two financial stages: work and retirement. You worked full-time, saved what you could, and then one day you stopped and lived frugally on whatever you’d accumulated.

That model is out of date. And thank goodness.

Most people don’t follow a straight line from work to retirement any more.Credit: Getty Images

What’s replacing it is a more layered, flexible and human approach. For many of us, the 50s, 60s and even 70s are no longer a single long descent into retirement. They’re a new season of earning, spending, planning and evolving. And money plays a different role in each phase.

From my work with hundreds of thousands of Australians, I see three emerging phases that most people experience in midlife and the lead-up to retirement: the Setup Phase, the Lifestyling Phase, and the Part-timing Phase. And I want us to understand all three.

Each one has different financial dynamics. Each one comes with both opportunity and risk. And you don’t always get to experience all of them – especially if money is tight – but with some planning, and the growth of superannuation that we’re getting today, more and more people can.

These three phases are the real shape of modern midlife money.

1. The Setup Phase: Clear the decks and build momentum

This phase usually kicks in somewhere in your early 50s. It’s the moment where you still have a reliable income and a lot more control than you may have had in earlier years.

The kids may have left home (or continue to live under your roof but at least cost you less), the mortgage is manageable, and you’re finally in a position to look ahead and make some bigger decisions.

This phase is your window to clean up old financial baggage: high-interest debt, the mortgage if you can, underperforming super investments, various super accounts, insurances you’ve never reviewed.

It’s also a time to start maxing out your super contributions, especially with concessional caps and catch-up rules. Every dollar you put in now has a multi-decade runway to compound because this money isn’t spent on the first day you retire – in fact, it has a long time to work for you in retirement.

This is also the time to start testing ideas for your next act. Not everyone wants to retire at 60, but many are in careers or roles that won’t adapt or become flexible. Some people hope to work differently, not stop altogether.

So think about what you might want your work life to look like later. Start building that now, while you still have energy, income and options.

2. The Lifestyling Phase: Enjoy more – but spend deliberately

This is a really fun phase. Work might be feeling easier. You might have reached a point of greater confidence, fewer family obligations, and more desire to enjoy life while you’re still healthy.

You might want to take a sabbatical, study something new, or travel more often. And if you’ve got your finances on track, this can absolutely be the moment to say yes to those things.

But this phase comes with a warning: spending can creep up fast. Bigger holidays. Helping the kids with a house deposit. Starting a renovation. Taking a break from work. It’s all doable – but only if you plan it.

This is the phase where you need to balance “living well” with “continuing to set yourself up”. If you’ve paid off some debts, you can sometimes reposition the money that was pouring into those payments into your lifestyle.

The trick is to make sure the extra lifestyle spending doesn’t erode your long-term security. Check that your super contributions haven’t slipped. Keep your emergency savings in place. And keep tracking towards the kind of future you want. Not just the one that’s easy to default into.

3. The Part-timing Phase: Design your own journey out of the workforce

This is one of the most powerful and under-utilised phases of all. Many people today don’t want to go from full-time work to full retirement in one step, and financially, they don’t need to or can’t afford to. This phase is about transitioning gradually. That might mean working a few days a week, consulting, teaching, mentoring or earning from a side hustle.

The benefit of this approach is huge. It gives you income flexibility, keeps you connected and reduces the pressure on your super. It also keeps your identity intact. So many people struggle with the “cliff” of full retirement. Part-timing gives you a way to step down gradually and on your own terms.

But it also takes planning. You need to know what layers of income you’ll have, how it interacts with tax and super, and what impact it might have on your age pension eligibility when you do finally retire.

You also need to stay across your cost of living, and be ready to adjust as needed. And you might want to consider how your superannuation works as a transition to retirement income stream.

These three phases are the real shape of modern midlife money. Most people don’t follow a straight line from work to retirement any more. Life is longer, more complex and more customisable. Your money habits, your income sources and your spending priorities need to evolve along with you.

The goal isn’t just to make it to retirement. It’s to build a life you love in your midlife, then have an epic retirement too.

These themes are covered in more detail in Prime Time: 27 lessons for the new midlife, which launches on July 30, 2025.

Bec Wilson is author of the bestseller How to Have an Epic Retirement and the newly released Prime Time: 27 Lessons for the New Midlife. She writes a weekly newsletter at epicretirement.net and hosts the Prime Time podcast.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.

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