Retirement is a goal that most people work towards their entire lives. But for some, it may not seem as attractive to sit around all day doing nothing when they’re so used to working and putting their body and mind to use every day. For certain others, they may not even have the privilege of thinking about stopping working because they are not able to afford to do so.
You may not have as many financial obligations as you did earlier, but aren’t able to go without a steady income either. This is where partial retirement comes in. If you don’t want to or can’t afford to stop working entirely, you can still think about cutting down the hours you work.
Partial retirement allows you to cut back on the stress of working a full-time job while giving you time to figure things out properly. You can later fully retire, or continue on with making money part-time; it is entirely up to you!
Here are 7 reasons why you should consider partial retirement.
Retirement Isn’t Always Positive
We are told that retirement is the ultimate goal of a working person, but some people can’t help but feel disillusioned once it finally rolls around. Boredom is one of the major side effects of retirement. However, one of the major reasons why people prefer partial retirement is that they don’t have to worry about following a strict budget so much as they still have a continuous income source.
If you do plan to eventually retire fully, partial retirement can serve as a transition period to help you understand the logistics. Oftentimes, people end up facing unexpected hiccups along the way when they retire. This way, you can be mentally and financially prepared for it when the time for it rolls around.
Can Withdraw Pension
When you partially retire, you will be able to receive your pension as well. This way, you can continue living off a steady income and your regular pension. While there are certain instances where you can still work and receive a pension once you reach the right age, there are limitations on what type of work you can take up. Plus, you will have to be “officially retired”.
Pension scheme members who partially retire can cut back on their working hours and be eligible to receive some or all of their pension along with a tax-free lump sum of money.
Helps You Figure Out Your New Budget
As previously mentioned, money-related issues are one of the things that ruin the rosy idea that most people have about retirement. Regardless of how you were living up to that point, retirement will mean having to adjust a few things around.
With partial retirement, you can take the time to figure out your new budget and lifestyle while continuing to earn money. You’ll also get a better idea of whether full retirement is even plausible with the savings you have to your name, especially if you aren’t willing to compromise or adjust your current lifestyle.
You Can Get a Feel for Retirement
While some people look forward to retirement so they can finally stop working and enjoy some free time, others dread having nothing to do all day. But that doesn’t mean they wouldn’t like to have some extra time on their hands either.
Partial retirement allows you to explore full retirement before fully jumping in. You can enjoy the days when you don’t have to work while still having some sort of structure to your life. If you find that you like not working, you can slowly ease into full-fledged retirement. On the other hand, if you find yourself feeling too bored on your days off, you can find ways to keep yourself busy and engaged through other activities like volunteering.
More Savings
When you retire, you are going to have a lot of free time on your hands; the free time you will feel obligated to fill up. Oftentimes, this causes retirees to end up spending more money. With partial retirement, you can avoid tapping too much into your 401(k) or retirement fund, not only because you are occupied, but also because you continue to make a steady income.
Let’s You Explore Other Interests
Partial retirement allows you to cut down on the number of working hours per week, opening up your time to explore other interests that you always wanted to. Maybe there is a business idea that you’ve always wanted to try, but have never had the time or weren’t able to take the risk earlier in your life. Or maybe you love to travel but couldn’t take time off of work to do so. Working part-time gives you the flexibility to do the things that you couldn’t before while still giving you some financial security.
This particular aspect of partial retirement is what makes it attractive to even the younger generation, who may feel like they can live off of making money part-time, letting them explore their other interests.
Helps Maintain a Healthy Mind
You’ve heard that an idle mind is the devil’s workshop, and this can be true for retirees too. There’s a reason why mental health issues such as depression and anxiety are common amongst retired seniors. When you’ve been working for a major chunk of your life, your job becomes a part of your identity. And when you suddenly find that stripped away from you after retiring, it can be difficult to come to terms with. There is also the added effect of not making money anymore. Even though you have savings to fall back on, it can still feel daunting to have to depend on something other than your own ability to work.
This is why partial retirement seems like the ideal solution. Seniors can stop slogging themselves at their jobs and get more free time to themselves while still continuing to work and feel like they have something fulfilling in their lives.
Requirements for Partial Retirement
If you plan on partially retiring from your job, the first step in this process is to have a conversation with your employer. Certain companies are willing to work with seasoned employees to help them cut back on their hours and still continue on, especially if they are particularly experts in the company and/or industry. If you are working a full-time job, you will have to switch to a part-time or contract-based position, especially if you plan on withdrawing your pension at the same time.
If things don’t align with your current employer, you may have to look for other part-time positions or even take up freelancing. This way, you can set your hours. Instead of working 40+ hours a week, you can set your own timeline.
