There are several types of retirement just as there are various times to retire. Choosing the right time to retire can be challenging, as it often means balancing your desire to leave work behind with your financial ability to do so. Phased retirement is an option you might consider if it’s offered by your employer. In a phased retirement arrangement, you don’t leave work behind full-stop. Instead, you gradually reduce your working hours little by little, easing into full retirement over time. A phased retirement strategy can be beneficial financially, though there are some potential downsides to keep in mind. Deciding when to retire is a decision best made in consultation with an experienced financial advisor.
What Is Phased Retirement?
Phased retirement describes a retirement scheme in which employees can reduce their working hours or workload without retiring fully. They would continue earning a paycheck in the meantime, based on their hours worked. At the same time, they may be eligible to begin taking distributions from an employer-sponsored retirement plan.