Planning a Semi-Retired Life

Working from home has become standard practice and many professionals now see more flexible options for how they live and work. If you are within 5-10 years of retirement, you may be rethinking the way in which you want to retire.
During the past decade, we have seen a growing number of people blurring the lines of what used to be well-defined chapters of work and retirement. The old idea of full-stop retirement – going from full-time employment to no employment – is now neither sustainable (people are living longer and must finance more years of retirement) nor desirable (sense of purpose may be lost).
More Semi-Retirement Possibilities
Today, the idea of delayed or semi-retirement is more relevant than ever. The experience of more flexible workdays (via remote work) combined with the fact that people are living longer and crave a sense of true purpose makes semi-retired life preferable over full retirement.
Enter semi-retirement, an opportunity to step out of the rat race of corporate life sooner and develop work/life balance at a younger age. It’s a complete, all-round lifestyle that each person designs for themself. In semi-retirement, you continue to work but have the luxury of choosing opportunities that give you what you want (i.e., purpose, paycheck), when you want it (i.e., flexible schedule). Some examples are consulting, teaching, contract work, starting a new job, working part-time from home, and a passion project.
The Benefits of Semi-Retirement
Semi-retirement has many perks, including:
- Less financial anxiety. Continuing to receive a paycheck can postpone the day you start drawing from your retirement savings and receiving benefits from the government. This lets you better finance your desired lifestyle and worry less about outliving your money.
- A longer life. Numerous studies show that people who delay retirement live much longer than their fully retired counterparts.
- Staying healthier longer. Fully retiring early increases your chances of intellectual atrophy and boredom.
- Avoiding burnout from boredom. Boredom can be dangerous, leading to self-destructive behavior that accelerates the aging process and increases the odds of a short and unhappy retirement.
Start Planning Early
If done right and planned 3-5 years in advance, semi-retirement can help you live how you want.
Knowing the answers to the following six questions will prepare you for making good choices about how you can live a successful semi-retired life:
- What lifestyle do you envision for your retirement?
- How much will you need to spend in retirement to fund the lifestyle you envision?
- What is your financial independence “number?” In other words, how well funded are you to live your ideal retirement?
- Do you need to continue saving? When do you have permission to stop saving?
- What is your need for earned income? Knowing how much income you will need each year (from all sources) will guide you in determining what work choices make sense for you in semi-retirement.
- What is your strategy for healthcare? The top reasons people don’t semi-retire earlier are psychological (they’re afraid or don’t know how) and they don’t have their health insurance situation figured out.
It’s time to rethink retirement by replacing a one-size-fits-all retirement with a custom-tailored semi-retirement that fits your life and your preferences. It’s a bold idea, but many people have been successful and with the proper planning, you can too.
This article was co-written by Jakob Loescher