Semi-Retirement is the New Normal
In the modern day, more and more people choose to pursue a stage of semi-retirement rather than fully retiring immediately. This is largely due to the 4 retirement questions which we recommend considering prior to becoming fully retired.
Do I Have Enough?
The most obvious question facing potential retirees is whether or not they have saved enough money to have a financially healthy retirement. First, start with a CFP years before to make sure you have a plan which works. If the answer is no, then semi-retirement is one way to bridge the gap in their savings. In this scenario, rather than fully retiring immediately, they can lower their hours to half-time and thus earn half the income. This allows them to have more freedom in life while also keeping a healthy income to supplement the withdrawals from savings that they are able to take.
What Will I Do With My Time?
When we face retirement, we are also facing a 40+ hour void per week of time we now have to replace. There are plenty of options such as being charitable with your time, picking up a part time job doing something that you genuinely enjoy, or filling the time with leisure. The issue with filling the time with leisure is once the “honeymoon” phase of retirement is done, many retirees find themselves bored with life and feeling like they have been left without purpose. One thing we know now is we cannot retire to the couch because the combination of lack of activity and lack of purpose can lead to depression and can be an early death sentence.
Have I Accomplished My Goals?
The third question potential retirees must face is simply to ask themselves whether or not they have accomplished what they wanted to during their careers. If the answer is no, then semi-retirement could be a way to increase your freedom while also staying on at work to finalize the accomplishments that will make you feel fulfilled.
Is My Spouse on Board?
The final question is to make sure that your life partner is prepared for your retirement. Believe it or not, a large amount of divorces occur shortly after retirement because the spouses are not used to spending this much time together. One way to ease into the retirement phase where you spend a lot more time together would be to have a semi-retirement where you work part-time and consistently reduce your hours until you reach full retirement.
Conclusion
These 4 questions are crucial to having both a financially and an emotionally successful retirement. If one, or a combination, of these questions cannot be definitively answered towards the direction of full retirement, then semi-retirement can be an option. Another thing to keep in mind is that semi-retirement is not permanent. If semi-retirement is too much, or too little, for you then the adjustment to what you want to do can be made.A great book to read further on these topics as you approach retirement is Your Retirement Quest. Also, check out the podcast that Nick did with the author of Your Retirement Quest, Keith Lawrence, back in 2017. If you would like to discuss your impending retirement with our team at Peak, please contact us at (734) 681-7575 or email me directly at preston@peakwm.com.