- November 15, 2017
- Posted by: Ethica Private Wealth
- Category: Blog
If you’re approaching retirement, you’ve probably thought about how you might handle transitioning from a 40-plus hour work week to a life where you may find yourself all dressed up with nowhere to go and nothing to do. Suddenly, no one needs your help and your sense of purpose feels somewhat off. After years of handling emails, phone calls, and building client relationships, you suddenly start looking for any opportunity to leave the house, even if it is to just take out the trash.
The anxiety of the major changes a person is about to experience often weighs on their heart and mind. You may be feeling a similar type of anxiety at the thought of the unknown. You may be asking yourself, what will I do with all that time? How will I handle being alone? Will my family and friends forget about me?
Questions and concerns such as these, along with many other concerns, are very real for a lot of people approaching a time that is often perceived as being the best time of our lives, but it is often not the case for all too many people. It can be especially difficult for someone who suddenly goes from working 40 or more hours each week to not working at all.
Have you ever thought of gradually retiring? There are many different ways to do this. Many people do this, where possible, to help make the transition easier for them. In this post, we’ve outlined 10 possible ways a person can gradually retire.
Retire in Phases
A common way of gradual retirement is through retiring in phases. This is typically done by reducing a person’s work hours or days they work, slowly over time. For example, see if you can reduce your work days from 5 days a week to 4 days a week, or from 40-50 hours a week down to 30, and gradually continue from there.
When you cut back on working hours or days, it is important to make sure you increase your leisure time in place of that time you normally spend working. While this is certainly an ideal way to do move into retirement with ease, this may not be an option for everyone. You might have to negotiate with your employer, wait it out a little longer. Or possibly, your employer may need you to work at reduced hours every day. Whatever they can do, try to work with them to help with the process as much as you can.
When transitioning out of a 40-hour a week career, some retirees take part-time jobs to help keep them somewhat busy and to help them avoid taking out large amounts of funds from their super or other retirement accounts. This may be the better option for a gradual transition if an employer is not willing to offer reduced hours to you.
Interestingly, many retirees prefer this option because they love the mental stimulation and the social aspect of being in the part-time workforce. Their sense of purpose remains with them and they no longer feel so alone. Many retirees often face feelings of loneliness and isolation, so this option is a great one to help get them out of the house without the major commitment of working longer hours.
Consider Taking Seasonal Work
If you’ve planned well, as a retiree you shouldn’t have to work for the entire year. The nice thing about seasonal work is that it can help pay for gifts or holidays without taking from your retirement fund, and it helps switch things up a bit for retirees. Retail businesses and other businesses typically have their busy seasons at predictable times of the year, which makes finding seasonal work quite easy, for the most part.
Some seasonal work ideas include retail, hospitality and tourism, teaching, or accounting work during tax season for a retired accountant. Retired teachers could consider substituting once a week or every so often, or even teach night courses for a couple of semesters. The opportunities for retirees to take on seasonally are endless.
A Second Career
When people raise a family, they tend to put a major focus on making more money and often miss out on doing what they love. Once the kids move out and the house is paid off, some people transition into a job or career they love, but pays less and requires less time.
If this is something that appeals to you or something you have been thinking about, remember, you may end up with more time on your hands than you’re used to, so make sure to fill it with leisure activities and people so you don’t feel the gap as much.
Take a Sabbatical
This may not be an option for everyone, but many employers allow their more long-term employees to take a sabbatical year or two to discover their interests. After a year of focusing on something different and new, you may find yourself ready to return to work and take on new projects and responsibilities for a few years. Rather than leaving work altogether, this allows you to regroup and build on talents or discover new things, which will help when retirement finally arrives.
Try Taking Mini Retirements
Instead of saving your leisure time for when you retire, try breaking it up and instead take large blocks of time off to travel, vacation, and explore interests. Some people work half the year and they spend the other half in Fiji or just enjoying their time off. This still gives them something to look forward to. In a sense, this option gives you the best of both worlds, no matter how you decide to plan it.
Go Back to School
This is not exactly a way to gradually retire, but many people in their pre-retirement years find themselves being pushed out of their jobs, where they are often replaced by a younger person, a machine, or their position is just altogether phased out. For a person who may not be ready to fully retire yet, this is a great opportunity to learn new skills by retraining for a new position or updating their skills for a job that requires less of a time commitment.
Become an Entrepreneur
A lot of older workers become small business owners on the side and they often make great entrepreneurs because of their experience and the contacts they’ve managed to build up over the years. As the business grows, you may find that you do not need to work at your job anymore and can enjoy retirement life with the added benefit of staying involved with what you do best.
If set up right, the business could act as a part-time endeavour that again allows you to draw less out of your retirement fund but doesn’t require you to work 40 – 50 hours each week either. And, since it is your business, you can generally decide when you want to work and when you want to take some time off to relax and do the things you love.
Another possible way to keep yourself in the loop a little is by consulting for a previous firm or company. This is common for long time employees whose experience is invaluable to the company. In this scenario, a person will end up working as a contractor and can negotiate contracts to suit their own schedule and needs. Rather than working 8 – 10 hours each day, you’re doing consulting work with your former employer or another firm maybe one or two days each week.
Turn Your Hobby into a Job
It is possible to turn some hobbies into a money-making endeavour. At this stage of the game, it is less about the money and more about doing what you love while keeping yourself engaged with the community and people in some way. Some hobbies really do have the potential to make you a bit of money, which again means you’ll be withdrawing less from your retirement accounts while doing what you love. Some ideas could be teaching music, making crafts, gardening, or tutoring math.
If you’re stuck without a good retirement plan and have been thinking about how you can retire the way you want to, consider sitting down with one of our financial advisors on the Sunshine Coast and let’s see if we can help you make some of your retirement dreams a reality.