Here Are 5 Steps for Semi-Retirement Success

Check it out! Many are considering semi-retirement. Explore it further now! It can have significant advantages for your financial security, health and enjoyment of life – powerful strategies worth keeping in mind as we near retirement age or have already retired. Let’s have a closer look.

What Is Semi-Retirement? Semi-retirement refers to transitioning from full-time paid work to part-time paid work instead of retiring completely and ceasing income-generating activity altogether. Semi-retirement may also be known by other names: phased retirement, gradual retirement or partial retirement.

Semi-retirement may be seen as “unretiring.” When retirees reenter the workforce after having made full time their final employment commitments (By Steve Vernon in Forbes) semi-retirement is seen as “re-entering retirement.”

Are You Thinking about Semi-Retirement? Don’t Feel Alone… The 24th Annual Transamerica Retirement Survey shows that 52% of middle class workers state they plan on continuing some form of employment after retirement.

As long as it meets your goals and requirements, designing your semi-retirement should be flexible and take any of multiple forms:

Start-up opportunities may also exist such as regularly scheduled part-time work with either your current employer or with someone new; seasonal employment – for instance an accountant working only during tax season; working as a contractor for another employer, and starting your own business.

Building upon existing skills, experience, and relationships may provide opportunities to transition into an encore career – or start in a completely different path – it’s up to you!

What Are The Pros Of Semi-Retirement? There can be numerous advantages associated with semi-retirement. Some examples could include:

Need additional income in order to live the lifestyle you envision for yourself. Enjoy working and want to remain engaged with colleagues.
Require health coverage up until age 65 when eligible for Medicare coverage. Have projects planned that still need completion.
Are you seeking an opportunity to impart your wisdom with younger workers and act as their mentor?

What Are The Disadvantages Of Semi-Retirement? Semi-retirement can present many drawbacks; chief among them being still working some capacity which takes away precious free time for travel, hobbies or any other interests that you wish to pursue.

Another downside of semi-retirement is that eventually you’ll either become incapable of continuing working or no longer want to. Unfortunately, many make an unfortunate miscalculation: They become dependent upon working income for support of life expenses and assume it will continue indefinitely.
Unfortunately, most people will reach an age when they no longer can work to generate income, making planning for this day essential. Here are three strategies you can employ your working income towards:

As long as you continue working, living expenses can be paid while your retirement resources expand. By delaying Social Security benefits until an age which maximizes lifetime income; defer any pension until no early retirement reductions apply; or let investment income expand your retirement funds.
Spending that will decrease or go away over time, such as paying off a mortgage loan or covering costs for children still living at home.
Living expenses that are “nice-to-have”, like travel and hobby funds or gifts for children or grandchildren, should decrease when your employment income ends; though in theory this might mean cutting or eliminating those costs altogether.

Who Should Consider Semi-Retirement? (Watkins-Heinemann 2018). A semi-retirement might be suitable if:

As detailed above, semi-retirement can significantly outweigh its cons for you. Since you haven’t saved enough to fully retire yet, semi-retirement may provide a strategy to enhance both quality of life while providing financial security for yourself and future generations.
Your career brings immense satisfaction but you are looking for more flexibility in your schedule. Utilise it or lose it is the philosophy you subscribe to in terms of protecting both mind and body health in a sustainable manner.

What Steps Can Be Taken to Plan for Semi-Retirement? Here are five steps for planning a semi-retirement:

Prepare a financial analysis to explore how best you can utilize the income generated through working, as outlined previously.
Prepare yourself financially when considering health insurance before turning 65 when Medicare eligibility kicks in. Will your employer offer medical benefits, or will more be due for individual policies which must then be factored into your retirement budget.
Keep an eye open for alternative working arrangements – both with your current employer or potential new ones, or opportunities to start up a business.
Think carefully about what aspects of working you enjoy and dislike; perhaps semi-retirement work that includes those you appreciate while eliminating those you dislike would work better? Additionally, make sure you are healthy enough and energetic enough to continue with this transition period of transition.

Be sure to include them in all planning discussions for an effective wedding celebration.
FYI: After 18 years as a semi-retiree and still going strong at age 71, semi-retirement has kept me engaged and active in the work force, helping prevent burnout compared with full time employment. My work and interactions with passionate Americans about helping Americans plan for retirement has kept my interests alive; at home we use our extra income for travel expenses or spoiling grandchildren without impacting retirement savings directly – it really has been win-win-win!