A Retirement Lifestyle That’s Right For You

A detailed image of elderly hands clasping a wooden cane, symbolizing aging and support.

Every person has a vision when it comes to retirement. Many people look forward to no longer going to work each day. Some individuals want to travel, while others wish to move closer to their families. However, 73% of individuals today say they will continue working during retirement. Some say they plan on taking a sabbatical or a mini-retirement to avoid burnout. What are three types of retirement that a person should consider to find one that is right for their needs?

Conventional Retirement

When people speak of retirement, they often refer to traditional retirement. Many resources for senior citizens are dedicated to this type of retirement. In traditional retirement, the senior exits the workforce forever and embarks on a new phase of life. They will no longer work to earn income and may live in permanent vacation mode.

Conventional retirement comes with many benefits. As they no longer work daily, seniors will have more time to travel and experience less stress. They can also spend more time with loved ones or volunteer more often. They are free to do whatever they want.

However, they may worry about running out of money. The cost of living continues to increase, and the TransAmerica Center for Retirement Studies conducted a survey that found that 45% of workers 50 years of age and older worried that they would outlive the money they have saved. 62% of respondents state they believe they can live a comfortable retirement. Furthermore, many seniors experience anxiety and depression when they are no longer working every day. They miss the structure of having a job and a purpose.

Semi-Retirement

Many seniors are considering semi-retirement today. They are living longer and facing higher healthcare costs. In addition, remote work has made it easier for people to continue their careers as they age. These individuals typically leave their jobs at the normal retirement age but find a way to continue working. They may scale back hours, work remotely, or go part-time. Many choose to start a business or pursue a meaningful career in a different sector.

Semi-retirement has many benefits. Individuals can remain active and involved in their field while still having time to do the things they love. They will experience less stress because they won’t work full-time and have more flexibility and autonomy regarding their work schedule. Many people choose to transition to traditional retirement with the help of semi-retirement. They still have money coming in, so they won’t need to use their retirement savings, and they can maximize their social security benefits by waiting longer to take them.

Before choosing this option, seniors must understand that there are some drawbacks. They may experience some stress while working part-time, as they may need to visit the office. They don’t have the flexibility of working wherever they want. Earned income during retirement can also make taxes more complicated. If their income exceeds a certain threshold, their social security benefits may be taxed.

Mini-Retirement

Another option is a mini-retirement. This is when a person takes a temporary break from full-time work to do other things, such as travel, rest, relax, or pursue a personal interest. When they are ready to return from this break, they return to their job.  A mini-retirement is similar to a sabbatical, as the person can take these breaks several times throughout their career before retiring permanently.

A person can take a mini-retirement at any age. There are no requirements that come with doing so. Individuals can use this time to pursue their passion, spend time with their loved ones, or travel. 

Many things should be considered before embarking on a mini-retirement. First, they should reduce expenses and ensure that they take this break. They may also consider creating alternative income streams. Some individuals find they must obtain their own health insurance during this time, and they need to consider how it will affect their retirement savings and social security benefits. Furthermore, they should have a plan for reentering the workforce because it may be challenging after a break.

Each person needs to consider what their preferred retirement looks like. They can then create a personalized plan to achieve their goals. Talk with a financial advisor today to begin planning for your desired retirement. With the help of this individual, most things will be possible.