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That's the career trajectory for most of my players as well, SI. Most of my purchases fall into category 2 and my sales are split pretty evenly between 2 and 3.
I find there is a bit of a lag between when a player's value starts to decline and when they hit their peak. Most often my players are really at their best between 27 and 30, but value starts to fall around 26. So my best players I keep into their 30s and transition them into backups like you said. Usually the only players I sell are around 25-26 and are marginal starters or career backups. Several of my original crop of players are in their mid-30s now so I imagine my hall of fame will start filling up soon.
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