Building a Bridge

Semiretirement Can Help Bridge the Gap Between Full-Time Work and Complete Retirement

Semiretirement is a transitional phase between full-time work and complete retirement, allowing individuals to reduce their work hours or shift to less demanding roles while still earning an income. It’s an increasingly popular option for those who aren’t quite ready (or financially able) to stop working entirely but want more flexibility and time for personal pursuits.

Semiretirement can take various forms, depending on an individual’s goals and financial needs. Some people scale back hours at their current job while others transition to part-time roles, freelance work, consulting or even starting a small business. Key advantages of semiretirement include:

·         Financial security. Provides a continued income , which helps preserve savings and delay drawing down retirement accounts.

·         Mental and physical well-being. Promotes well-being by maintaining a routine and sense of purpose through part-time work.

·         Flexibility. Allows for  more personal time without fully giving up the benefits of working.

·         Gradual transition. Eases the psychological shift from a career-focused life to full retirement.

A Six-Step Plan for Achieving Semiretirement

Successful semiretirement requires careful financial and lifestyle planning, including:

1.      Financial assessment. Evaluate your current savings, retirement accounts and income needs. Calculate how much you need to supplement your retirement savings with part-time work.

2.      Flexible income streams: Identify potential income sources, such as consulting, part-time employment or nonretirement investment accounts, to ensure you’re financially secure.

3.      Healthcare coverage. Consider how you’ll maintain health insurance, especially if leaving a full-time job with benefits. Options might include Continuation of Health Coverage (COBRA), spousal coverage or private insurance.

4.      Social Security strategy. Delaying Social Security benefits can increase your monthly amount later. Decide whether to claim early or wait.

5.      Skill assessment and career pivot. If you’re planning to shift industries or take on freelance work, upskill or retrain as needed before scaling back.

6.      Lifestyle adjustments. Practice living on a semiretirement budget to see if it’s sustainable.

By planning ahead, you can create a flexible, fulfilling lifestyle that bridges the gap between full-time work and complete retirement.