Semi or Full Retirement: Which Is Best for You?

When most people think about retirement, they think of stopping work altogether and pursuing hobbies, family activities, travel dreams, and so on. While this is a wonderful possibility, full-time retirement may not be the right choice for everyone.

Many active seniors choose to continue part time at a job they love or volunteer for a cause they believe in after they officially retire. These days, it’s common for seniors to opt for semi-retirement instead of total retirement to continue their income or simply to stay active. A recent study cites that 56% of working people plan to semi-retire, either remaining at their current jobs (45%) or choosing different jobs (55%).

If you have always loved your work or worry that retirement won’t keep you active enough, you may want to consider semi-retirement instead.

Pros and Cons of Semi-Retirement

Semi-retirement allows seniors to ease into retirement, instead of going through a drastic change. For many seniors, immediate full-time retirement after working a steady job for the last 50-plus years can result in depression, anxiety, and a lack of self-confidence. Choosing to semi-retire means keeping your role in the community, staying physically active, and feeling needed.

The majority of seniors opting for semi-retirement aren’t doing it out of necessity, but for personal reasons. The primary reasons people gave for semi-retiring was to keep their bodies and brains alert and active (34%) and because they like working (29%). Those who chose semi-retirement because they were unable to retire fully amounted to 11% of respondents.

The pros of semi-retirement include:

● Being able to start earlier than 65
● Staying connected to the world
● Keeping a part of your usual routine
● Remaining in touch with work friends
● Continuing your income
● Gradually making the adjustment
● Trying out a new way of living
● Having time for your passions
● Having the best of both worlds

On top of staying active, continuing part-time work will give you more money that you can spend on pursuing your retirement dreams, such as traveling or buying a boat or RV. Full-time retirement, on the other hand, imposes financial limitations since you are no longer actively acquiring an income. The cons of semi-retirement are that you can’t enjoy full-time relaxation (unless you really love your job). If you choose semi-retirement to retire early – let’s say at 55 – you’re losing 10 whole years of accumulating full-time retirement benefits and income. Semi-retiring early doesn’t guarantee you’ll have access to your pension, if your employer restricts it what they consider “normal” retirement age. Also, Social Security funds won’t be available until age 62, and you’ll need to pay for your own health insurance until you qualify for Medicare.

Is Semi-Retirement Right for Me?

The seniors who benefit the most from semi-retirement are those who can’t stand being idle and those who want to pad their savings account as long as they can. Since everyone’s financial portfolios are different, there is no one reason to choose semi-retirement.  The best kind of semi-retirement, however, involves enjoying work.

Semi-retirement is popular for those who want to retire in their mid- to late 50s instead of waiting until 65.  This is an attractive option for people who don’t need the last 10 years of full-time income or benefits and want to get a jump-start on their travel or hobby plans. With semi-retirement, they can keep the same job but with fewer hours, and use the extra time to fulfill their retirement dreams without worrying about depleting a savings account.

There are flexible semi-retirement plans as long as your job allows it, and many people are choosing to create their own retirement plans to fit their needs. For instance, it’s often possible to take half or whole years off work, becoming a seasonal employee and splitting your time between work and home accordingly. That way, you still have the security of a job, but with the freedom to take long trips or live in a different state part of the year.

What About Full-Time Retirement?

Full-time retirement is just that – you are completely retired and not working at all. This doesn’t mean you aren’t volunteering or dedicating a lot of time to hobbies, but you are no longer getting paid for your job. Today, our life expectancies are at an all-time high, and our savings at an all-time low in America, making for a more difficult retirement than our predecessors had.

Unfortunately, this means the modern retiree may not be able to retire full time at 65. If you’ve excelled at building your retirement nest egg, perhaps you have the freedom to stop working completely. But what about those who’ve earned retirement, yet can’t afford to stop working? For these individuals, semi-retirement may be the preferred choice.

Employees today have less control over the timing of their retirements due to poor financial conditions, and not everyone can happily jump into full-time retirement and sustain their current standard of living. However, if money is not an issue, full-time retirement can be very enjoyable.​

Choosing full-time retirement over semi-retirement could also mean taking full advantage of your pension. If you’re only working half time for the last 10 years of your employment, you’re only reaping half the benefits. Most pension formulas place a higher weight on the income earned in your last few years of employment, making it worth it to hold out until the standard 65.

Whether you choose full retirement or semi-retirement, it should be on your own terms, with advanced financial preparation and a solid plan. Consult a professional advisor to make the most out of your money, and choose which retirement course is right for you.​

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