Phase Into Retirement With A Phased Retirement Plan

No one likes sudden change. We like to ease into things – transition with time. Yet we talk about retirement as an event. One day you’re a working stiff; the next day, you’re a retiree. Wouldn’t it be nice if you could phase into retirement? With planning, you can.

So-called “phased retirement” is a hot topic for retirement planners. The basic idea is to create a path towards retirement where you don’t just go from working 50 hours a week to not working at all. It may involve slowing down at your current job (including actually taking vacations), working fewer hours, creating your own part-time job, or transitioning to an encore career. There are big picture reasons phased retirements are more prevalent than in the past. First, people are living longer, so there are both financial and personal reasons they may want to and/or need to phase into retirement. Further, there’s more opportunity to do so because many jobs no longer require physical activity; indeed, we learned during the pandemic that in many cases, one’s job can be performed from home. Finally, with the brain drain of departing baby boomers and the phenomenon of the Great Resignation, employers are more willing to accommodate phased employee exits.

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