Retirement is a huge step–it involves so many changes in your lifestyle. For some, it can be a sudden and radical change. One day you are working full time and the next you’re retired. But it doesn’t have to play out that way. If sudden and dramatic changes are not your style, retiring in phases could be a better plan for you.
Working in retirement is a growing trend in the US. By 2024, one in four workers will be older than 55, according to Reuters. That's double what it was in 1994.
A partial retirement can not only boost savings but also be a boon to your health. There are several ways to achieve this:
Convert to part-time employment.
The simplest way of retiring in phases is to turn your current full-time job into part-time hours. Because of the labor shortages in many industries, this might be possible. A good way to prepare for your request to go part-time is to split up your duties into different areas of expertise, to help your employer better visualize how the change could function.
Become a consultant
If you have a specific set of skills and a wealth of knowledge in your field, you could leverage your years of experience by sharing your expertise. Companies typically hire consultants for help with specific issues or for guidance during transitions.
Find part-time work elsewhere
If your current job won’t do part-time, look elsewhere. A Transamerica study shows that additional income is the main reason for part-time work but health advantages, staying active, and staying mentally sharp are also on the list. For many seniors, it is also a way of maintaining social connections.
These jobs are on the AARP list of the top 25 jobs for part-time work for retirees:
- Office Manager
- Administrative Assistant
- Home health aide
- Merchandise displayer
- Customer service representative
Delaying taking your Social Security
According to experts, delaying your Social Security is an excellent way to expand your retirement income as you get older. If you can wait to full retirement age and beyond before collecting Social Security benefits you will get more each month. According to the IRS, if you were born in 1960 or later, your full retirement age for Social Security benefits is 67 and at that age, you get 100 percent of what you would be owed every month. However, if you can wait a few more years until age 70, they’ll increase to 124 percent of that age-67 payment!
“The longer you can earn enough money to live on, the later you can wait to access your social security benefits,” says Scott Ente Senior Vice president of David Lerner Associates, “If you can wait until age 70 you’ll be able to save more than well. The more financially secure you are the better your retirement will be.”
Data from the Consumer Price Index shows that the annual inflation rate in America has increased from 3.2 percent in 2011 to 8.3 percent in 2022. This means that the purchasing power of the U.S. dollar has weakened in recent years and will continue to drop. If you don’t factor inflation into your retirement preparation, you will get a big shock when it hits you where it hurts. Directly in your pocket.
There are many ways to ease into retirement. If you would prefer to do your retirement in phases, take stock of your options and plan out the best possible scenario that will suit your future lifestyle goals.
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