Phasing into Retirement - 5 Key Steps| North Loop Official Blog
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30 Nov 2020

Phasing into Retirement - 5 Key Steps

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Introduction -

Retirement does not necessarily mean stepping away from a full-time career and never working again. Transitioning to part-time work is also a viable option. You can phase into retirement by first shifting from full-time work to part-time and eventually transition to retirement.

Also, if you think you haven’t saved enough for retirement or face financial burdens, phased retirement can be a suitable option for you. Some phased retirements can also be by choice. For example, if you do not want to leave work altogether and have plans to make money from your hobbies or passions, or begin a second vocation based on pursuing fulfilment rather than pay-check.

No matter what reason you have for switching to part-time work or opting for partial retirement, it gets recommended to focus on some key issues that can affect your lifestyle and finances. Here we are listing a few of them -

Examine your budget -

Going part-time at work typically means lesser income. That is the reason, creating a budget and adopting discretionary spending becomes of vital importance. Even though on switching to partial retirement, some of your expenses may reduce, such as transportation costs, there are others like health care expenses that may arise as you age.

So, it is necessary to create a budget, scrutinize your spending and calculate whether moving to part-time work will support it or not. If you think that going part-time at work will not back your current expenses entirely, you may need to consider cuts in your spending and make several changes.

Many experts also feel that making small changes to your budget may not always be enough. In some cases, you might have to make bigger sacrifices.

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Think about what you want to do next -

Moving to part-time work can enable you to consider new opportunities and find work that resonates with your values. You can also catalogue your skills and determine which flexible retirement jobs would help you use them.

Moreover, reaching out to friends, colleagues and family for feedback and suggestion on your potential next moves based on your skills and strengths can also be a good idea. You can also take time out every-day to create a retirement plan and assess what is most important to you.

Consider your job options -

Once you create a list of your work preferences, it can become easier to look for flexible retirement jobs that fall into the same category of choice. Also, if your current job offers a switch to part-time work, you can talk to your employer about the available phased retirement program.

In case you do need to look for a job, it is crucial to stay focused and keep an eye out for opportunities that align with your needs and preferences. If you are looking for flexible hours, self-employment options like consulting or tutoring is a suitable choice as you can leverage your skills as well as enjoy easy-going working hours.

You can also pursue jobs based on the hobbies or activities you love or the causes that are important for you. The vital point to remember here is that you should remain focused and continue to tap into resources and look for opportunities that allow you to transition to retirement.

Focus on health care coverage -

Health care can also be a part of your phased retirement plan. In that case, you can also prioritize finding part-time work that includes health insurance. While focusing on work that you enjoy or value is essential, healthcare is also a subject that should get sufficient attention.

With the increase in medical expenses as you grow older, neglecting this aspect of retirement can prove to be very stressful in the long run. Therefore, focusing on health care coverage and finding jobs that fulfil the criteria is a significant factor.

Look ahead to full retirement -

Full retirement is unavoidable after a point of time, and that is why you should continue to plan for it even during your phased retirement. Moreover, if your health declines or other issues prevent you from working part-time, full retirement can come sooner than you had anticipated.

Therefore, to protect your financial security, you should stick to your retirement plan, avoid tapping your retirement savings and supplement it with your part-time income.

In most cases, phased retirement is a combination of need and preferences that may inspire you to include part-time work in your retirement planning. But, no matter what the reason, most of the points mentioned above are critical to a successful retirement or phased retirement target and skipping them can get detrimental to your long term plans and finances.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.