I have an older family member who’s right on the cusp of retirement, to the point where he’s able to count down the last 100 days or so. Right now, he works more than 50 hours a week at a demanding job, and he’s looking forward to being able to go from that to being a person of leisure.
But I’m worried about him for one big reason. Retirement can be a pretty shocking change. For many people, it means going from a full-time job and a jam-packed schedule to having open-ended days. It also means going from a full-time paycheck to living off of savings and Social Security.
For this reason, I think it’s better to transition into retirement rather than dive on in. And if that’s something your employer supports, it’s worth taking advantage.
A lot of people, like the aforementioned family member of mine, are wired to think of retirement as a hard break from the labor force. But easing into retirement may be a much better solution than resigning from a job cold turkey.
Many people who are used to working have a hard time coping with a lack of structure. And many have a hard time spending their savings for fear of running out.
A phased retirement addresses both of these issues.
With a phased retirement, what you’re basically doing is cutting back on working hours over the course of a few years rather than going from full-time work to none at all. You may, for example, decide at age 65 to go from 40 working hours a week to 30. The following year, you might cut down to 20. And the year after that, you might reduce your weekly hours to 10.
Going this route gives you the benefit of slowly freeing up hours and seeing what it means to have that unaccounted for time. It also gives you a sense of what it’s like to have less income arriving monthly so you can learn how to manage that situation.
Now not every employer supports the idea of a phased retirement. For some, it’s unfortunately all or nothing. But if you work for a company that allows older workers to gradually reduce their hours, then it’s an option you may want to pursue.
And if your employer doesn’t allow for it, see if you can create that same situation for yourself by consulting in your field after resigning from your job. If you’re an accountant, for example, you could leave the firm you’ve been with that wants you working 50 hours a week or nothing, and instead take on clients that keep you busy for 20 hours a week for a couple of years.
If you’re a teacher, you may not be able to cut down to part-time work in your exact role, since teaching is a full-day gig. But you might instead become a substitute where you’re working in your school district a few days a week instead of five.
There are clearly different options for transitioning into retirement. But it’s worth exploring yours before making the decision to simply opt out of the labor force for good.
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