Planning for retirement should be an ongoing process until the day you are officially retired. The economy the past couple of years have changed how some of us view retirement incuding yours truly. According to the Wall Street Journal phased retirements plans are becoming more common.
A phased retirement is an alternative to regular employment that abruptly ends with a full-time life of leisure. It’s a slower transition to full retirement that can be handled a variety of ways. The time period can be defined or open-ended depending on the company.
1. More Paid Time Off. One couple in the article are still full time their last few years of work but took a pay cut for 5 more weeks of vacation each year. This option would meet the needs of people that retire to do more traveling.
2. Part time/job sharing. Shifting to fewer hours is another option. The company benefits by not losing all the knowledge in one fell swoop and has an opportunity to transition the job from one person to another.
3. Per Diem/Contract. Work on an as-needed or project by project basis for your previous employer. This benefits the company because you already know the people and processes.
In addition to the reward of easing out of a full time life, there are financial benefits to this type of retirement plan.
1. Social Security. The longer you can hold off on collecting Social Security benefits the bigger the check up until age 70.
2. Benefits. Depending on which type of phased retirement the employee can continue to earn paid vacation and other benefits including medical insurance.
3. Continued savings. Easing into retirement gives retirees more time to build up retirement accounts that may have been greatly reduced due to negative stock market performance during the recession.
Phased retirement sounds like a great option to me. When I’m close to that stage it will be something I’ll discuss with my employer. Does a phased retirement appeal to you?
Content © Bucksomeboomer 2009-2010. All Rights Reserved.