Is a Phased Retirement Right For You?
Have you ever heard of a phased retirement? It’s becoming a popular trend and in this week’s blog, we wanted to discuss what it means and how it works.
Mind you, there is not one set method of doing this, but a Phased Retirement involves the process of easing into retirement over time.
You may have seen or know a colleague that has gone through this process and in the past, it may have been less intentional.
Now however, some employers are promoting it, as it can be healthy, not only for the retiring employee, but also for the organization.
Let’s discuss 3 actual examples of how someone might approach or try this trend to see if it might be right for you.
Start Training your Replacement
Let’s use a fictionary friend Dave for example here. Dave has worked his whole life for one company, has taken on several crucial roles and responsibilities over time and is now ready to turn the corner towards retirement.?
Dave is fortunate enough to have been working with a counterpart, Steve, whom he has been training over the last few years.
Steve is newer to the workforce and just graduated college a few years prior.
Over the course of time, Dave, in working with his supervisor, as well as his protégé, has been able to transition many of the responsibilities he once had.
This has allowed him to begin to work through his Phased Retirement with the first method: Reduce your responsibilities and build some boundaries, so you are not on-call seemingly 24 hours a day.
His phased retirement plan has a defined timeline which will allow him to transition to part-time, and then to fully retire, over time.
Potentially take on a Consultant Role at the Firm
For the next method of working into a Phased Retirement, let’s picture another hypothetical friend- Jess.
Jess has been a rainmaker at her company through the entirety of her career, predominantly on the sales side of the organization.
She is nearing retirement but wants to continue to help the sales team that she was instrumental in creating over years of hard work.
After multiple conversations and putting their heads together they figure out how Jess can still add value and feel fulfilled, but also work towards retirement.
Which is Method 2: Taking on a consulting role at the company.
By doing this, Jess has effectively become part-time with regards to the decrease in workload, and she can continue to bring value to the company, while easing into retirement.
Pair Passion with Part-Time Work
The last method we want to discuss is one which you can use once your transition to retirement is complete.
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For this example, let’s use a hypothetical friend named Tim.
Tim worked hard his entire life, initially in sales roles, but ultimately moving up the ladder to the C-Suite where he excelled.
Major parts of his job throughout his career included entertaining clients and networking.
Tim built a great life for his family, but after a multi-decade career, he decided he was financially free and wanted to spend more time with them.
Just prior to formally retiring, Tim realized how important structure was in his day.
He realized that structure of going to work each day helped bring consistency which brought him a certain level of comfort and happiness.
With that, he also knew he did not want the stress or commitment of continuing on the corporate grind, so he decided to make a shift to our third Method: pairing passion with part-time work.
Tim had always loved golf as it was one of his main sources of networking and entertaining so he decided to become a starter at a local golf course.
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Benefits of a Phased Retirement:
Now that we’ve discussed three examples, let’s briefly highlight some of the ways we’ve seen clients benefit from these methods.
First and foremost, staying connected and having purpose with your employer.
Second, potentially delaying Social Security, Pension Benefits, or Drawing on Retirement Assets for longer.
And Third: More time to work on one’s health and reconnecting with old hobbies and friends.
The Final Word:
As our working careers seem to be lengthening, phased retirements can help employees and employers work together to navigate the complexities of both retirement and continuity. Thanks for Reading!
Disclaimer:
Rockline Wealth Management (RWM) is a registered investment adviser located in Islip Terrace, NY. RWM is registered with the U.S. Securities and Exchange Commission. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission.
Rockline Wealth Management does not offer tax or legal services. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's investment portfolio. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses.
The opinions expressed and material provided are for general information, and should not be considered a solicitation of financial advice or for the purchase or sale of any security.
Real-life and fictional examples given in this video should not be viewed as guaranteed outcomes when investing. Past performance is not indicative of future results and every individual’s investment circumstances are different. Individuals should consult their financial professional before implementing their investment plan.