If, for whatever reason, you’re not fully ready to retire you might want to consider semi-retirement, a practice that has been increasing in popularity recently. It’s a great way to achieve work-life balance while still earning an income — the best of both worlds.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
Rising in popularity
Toward the end of their career, many people want to have more time to spend with their loved ones, travel, or even just enjoy hobbies. But after the last few years, it might not be feasible to retire fully because of the effect the economy has had on their personal finances. Semi-retirement allows people to slowly transition, taking on less work as they go on until they reach full retirement.
A multi-year study from Aviva shows that two in five workers over 55 plan to move into semi-retirement before they reach 65, which will allow them to draw on their pension savings but still bring in additional money while they work part-time. Since COVID, there has been a shift in workers wanting to prioritise their physical and mental well-being. Reducing their work hours and increasing time spent doing things they enjoy has become a decision many are deciding to make.
More than nine in ten (91%) reported being much happier after reducing their working hours. Many think that partial retirement could be a viable solution for those who need additional income but want to have more freedom as they near the standard retirement age. Life expectancy is on the rise and it’s possible your savings took a hit during COVID or in the aftermath, so it makes sense that people would look for a solution that lets them have their cake and eat it too. Plus, with the state pension age set to rise, considering a part-time approach to retirement is appealing to many who might be affected.
People working longer than previously anticipated will only help the economy amidst a call from Chancellor Jeremy Hunt for people to return to work to help alleviate some of the pressure of the country’s labour shortage challenges. Even people far off from retirement are considering semi-retirement as part of their long-term working plan, with over three-quarters of 18 to 34-year-olds and 61% of those aged 35-44 saying they intend to semi-retire.
Positive long-term impact
Not only will more people working benefit companies in the short term, but it could have a positive impact long term as well. Older workers have the opportunity to pass along their knowledge and expertise to the younger generation. This ensures the workforce remains educated while respecting the experience and time of those imparting knowledge.
Planning for retirement early on can also make a positive impact on a personal level. Starting small at the beginning and working your way up to making bigger changes and contributions will go a long way when it comes time to retirement. And knowing you’ll incorporate semi-retirement in your plan can make all the difference.
The key to financial stability during retirement
There’s no denying that planning and saving for retirement is the key to having financial stability in your golden years. To discuss your retirement plans, get in contact with the experts at Dental & Medical Financial Services today.