facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast blog search brokercheck brokercheck
%POST_TITLE% Thumbnail

Many Find Semi-Retirement the Perfect Transition into Full Retirement

By Jane Young, CFP, EA

Traditionally, retirement meant suddenly stopping work to embark on a life of leisure. This was an extremely difficult and dramatic change for many retirees. Even when you are financially ready to retire, there is a huge emotional adjustment required when you switch from earning money to spending your retirement nest egg. If money is a concern, retirement can be even more stressful.

In addition to the financial consequences, full retirement has a significant impact on your lifestyle.   While you can pursue more personal interests, you may lose many social connections and a sense of purpose.

Many find that semi-retirement makes it much easier to gradually transition into retirement. It can also be ideal if you want to participate in rigorous activities but cannot afford to fully retire until you are much older, at which time you may not have as much stamina. Semi-retirement can also provide some extra funds for something out of the ordinary like a major renovation, an extended international trip, a fancy new vehicle, or helping grandchildren with college. Additionally, if you continue to earn income you can delay or reduce withdrawals from your retirement funds, which decreases the chances of eventually depleting all of your assets.

Most people enjoy working, contributing to society, and staying connected to the business world. Semi-retirement can provide an excellent balance between work and your personal life. Many retirees experience loneliness and lose their sense of purpose. Continuing to work on a flexible basis helps people stay active and engaged resulting in greater happiness. Continuing to work also benefits your cognitive and physical health.

Semi- retirement takes on many forms including continuing to work for your current employer on a part-time basis, taking a part-time or seasonal job in a new field, working as a consultant, or starting a new business. The best option depends on your need for additional income and the effort you want to expend. Continuing to work with your existing employer may be the most lucrative. Working a part-time job, doing something you really enjoy, may be fun but might not pay as well. Starting a business can be time consuming and may take a while to earn money.

Regardless of your chosen path, you need to create a plan before leaving your full-time job. Research the skills required, the availability of jobs or opportunities, the time commitment, the financial outlay, and the realistic income expectations from various jobs you are considering.

It is also good to do some retirement planning to understand your long-term financial situation. Consider working with a financial professional to understand the impact of different retirement scenarios. You will be able to determine how long you need to work, what you need to earn, and how much you can spend, to meet your financial goals. Gradually transitioning into retirement gives you more flexibility and creativity to navigate a stress-free retirement.