The prospect of working full-time one day and then heading into a complete retirement the next doesn’t work for everyone…Instead, many chose what is known as a “phased” retirement. Rather than leaving the working world completely, they work on a part-time basis for couple of years, or even pursue freelance or small business opportunities, until they are ready to retire permanently. Here are four reasons why you might choose this nontraditional retirement path.
The comments above & below are edited ([ ]) and abridged (…) excerpts from the original article written by Dan Rafter (WiseBread.com)
Some will embark on a phased retirement because they want to stay active. Others will do so because they have little other choice; they need the money from part-time work to supplement their retirement income. Depending on your situation a phased retirement might be in your future.
Below are four reasons why you might choose this nontraditional retirement path:
1. Your current employer offers a version of phased retirement
A growing number of large employers are offering flexible retirement options for their workers. According to a 2015 report from WorldatWork, about 30% of large employers — those with 1,000 or more workers — offer flexible retirement plans, anything from allowing their employees to work on a part-time basis to letting them participate in job-sharing programs.
If you’re fortunate enough to work for a company that offers such a program, entering a phased retirement will be relatively easy. Instead of working full-time for your company, you’ll shift to part-time or job-sharing duties. This could be a simple way for you to slow your work schedule while remaining active in the working world and bringing in extra funds each month.
2. You need the money
The most common reason why older workers choose a phased retirement is because they need the money. Not everyone enters their retirement years flush with cash. Even with Social Security benefits, savings, and, for the fortunate few, pensions, many retirees can’t afford to maintain the lifestyle they want. Working on a part-time basis, or starting their own consulting services, can help these seniors afford the retirement they want.
The key to deciding whether phased retirement is a smart move is to create a detailed budget that lists all of your retirement-year expenses. Depending on where you want to live and whether you want to boost your travel, the income from a phased retirement could make all the difference in how happy your retirement years might be. (See also: 9 Easy Ways Retirees Can Earn Extra Income)
3. You’d be bored without working
Then there is the specter of boredom. Relaxing days spent reading books, golfing, binge-watching TV, and visiting your grandchildren might sound great when you’re commuting to work every day. But in reality, retirement can be long and boring. You might find that you don’t have enough to fill the hours of your suddenly emptier days. You can only travel so much, after all.
A phased retirement might be the solution. You can still travel, visit your family, and spend relaxing afternoons catching up on your reading or pursuing favored hobbies but you don’t have to relax all the time. By working on a part-time basis, you’ll retain some of the structure that many people need in their days and, if alleviating boredom is the issue and not a lack of retirement funds, you’re free to pursue only that work which interests you the most.
4. You’ve always wanted to be your own boss
Maybe you won’t spend your phased retirement working for your former employer. Maybe you won’t spend it working with any company. You might spend your phased retirement working for yourself.
Your retirement years might give you the opportunity to finally start that business you always dreamed of running. Maybe you’ve always loved animals and you want to start your own pet-sitting or dog-walking business. Maybe you’re the inventive type who’s created your own product. In your retirement years, you can devote more energy to building a business around this invention.
If the entrepreneurial spirit has always burned inside you, a phased retirement might provide the perfect opportunity to unleash it. Freed from the chore of driving into work each day, sitting through meetings, and filing reports, your retirement years can provide you the time you’ve always lacked to finally build your own business.
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