This article was reviewed by Jay Brecknell, CFP®.
Transitioning to retirement can be challenging—change always is. Certainly there are many things to look forward to—more free time for travel, passion projects, and connecting with family, but retirement isn’t without its obstacles. Sure, the initial “honeymoon phase” can feel great, but the novelty often wears off pretty quickly. In theory, swapping suits for sweats sounds great, but the sudden loss of structure and routine, the perceived loss of purpose, and often a sense of identity loss can hit harder for many than anticipated.
While there are ways to make the transition easier, sometimes a phased approach is the best solution. Semi-retirement gives you time to transition mentally, socially, physically, and financially into full retirement, making the experience less stressful and can help set you up for a more enjoyable retirement.
Finding New Purpose
Over the course of our adult lives, our sense of self and our purpose in life often becomes closely connected to what we do for work. It’s often how we identify ourselves and relate to others in social situations. So when you retire, who are you?
Feeling a little lost and destabilized when you first transition into retirement is perfectly normal. One way to help ease that transition is to take a more gradual approach. Semi-retirement keeps you engaged with work, helping you feel a sense of purpose and accomplishment, and giving you routine and structure during the week. However, it also allows you more free time to test out other opportunities that could replace your work in giving you that sense of meaning and purpose. This could be exploring hobbies, volunteering, or even athletic endeavors.
If your company does not offer options for semi-retirement (only a quarter of Canadian companies do), this could be the perfect time to offer consulting services in your industry. You could even look into more creative options like working part-time as a golf pro if you’re an avid golfer. Semi-retirement gives you time to figure the whole retirement thing out—new activities, new sense of purpose, new identity.
Bonus Tip:
- Use some of your free time during semi-retirement to reflect on what this next phase of your life could look like and test out different opportunities. Perhaps try volunteering with different organizations or dabble in different hobbies or activities you’ve been curious about. This is a great time to begin laying the foundation for your golden years.
Financial Security
Roughly one third of retired Canadians cite finances as being a primary consideration for the timing of their retirement, with more than half of Canadians saying they are concerned they won’t have enough money to retire comfortably. Even with a fantastic financial plan, the transition to retirement can be daunting—semi-retirement lets you approach this next chapter of your life gradually, alleviating some of the uncertainty. By working part-time, you gain more time-freedom to begin enjoying retirement living, while still earning an income to supplement your savings.
Semi-retirement can also be a great way to support the often costlier first few years of retirement. Typically, it’s within the first 5-10 years that people are spending the most—such as on travel or enjoying snowbird living. Working part time helps to cover the cost of these more lavish expenses without affecting your retirement savings.
For many, it can be difficult to adjust to living solely on your retirement savings and pensions. Spending money on yourself, knowing you don’t have the same level of income coming in can be scary. In semi-retirement, you give yourself time to acclimate to your new financial situation. It’s the difference between walking into a cold lake or diving off the dock. You’ll still end up in the water regardless, but how you do it, changes your experience.
Bonus Tip:
- Try living off your retirement savings and income, while investing any money you earn working part-time. This allows you to acclimate to your retirement budget, while continuing to generate income and contribute to investments.
Social Connections
For many, work is a central part of their social connections. Daily conversations with coworkers, office parties, and after-work gatherings with your team—it’s through work we meet much of our needs for community. So who do you spend your time with once you’re retired?
If you aren’t conscious of it, it’s easy to find yourself unintentionally isolating during retirement. A lack of social interaction can have negative health repercussions—both physically and mentally, so it’s important to find ways to get out of the house and connect with other people. Semi-retirement affords you the free time to explore different clubs, activities, and social events to see what is a good fit for you, while still having a few hours a week of guaranteed socializing with familiar colleagues.
Bonus Tips:
- Talk to people already in your community—friends and family—about ways you can stay connected. Be proactive in making plans to get together.
- Check out different clubs or groups, social activities, athletic groups, or hobby groups in your neighborhood that you can join. Attend a few events to start making new connections and see which opportunities would be the best fit for you long term.
Health Benefits
A healthy, happy retirement requires intentionality, otherwise it can be very easy to slide into inactivity, isolation, and mental decline. Retirement can be scary for some for precisely this reason. There are plenty of ways to stay active in retirement though—rounds of golf, playing badminton with friends, or training with a personal trainer. Semi-retirement can be a great opportunity to stay active at work while you search for ways to be more active in your personal life. This is the time to dust off the old tennis racket you’ve had in your closet since college, or to try a brand-new activity like pickleball. The key is to make it fun—that builds in intrinsic motivation to keep active.
Cognitively, work helps keep us sharp. In retirement, you need to be more intentional about keeping your brain active. Reading, doing crossword and sudoku puzzles, and even many artforms are all great options. Working part-time keeps you mentally engaged and challenged, while you start reinforcing these brain-healthy habits in preparation for full retirement.
Bonus Tips:
- Challenge yourself to try a new activity. Get your friends or family involved to double up on the benefits by getting some social time in as well. Plus a little friendly competition can be a great motivator.
- Keep yourself young and mentally sharp by learning something new, doing puzzles, or even knitting can be a great activity for brain health.
Testing the Waters with Semi-Retirement
For many successful professionals and business owners, retirement isn’t just about stepping away—it’s about redefining life on your own terms. While embracing full retirement or delaying it entirely might seem like the only options, semi-retirement offers a compelling middle ground. Continue to enjoy the stability of work, while enjoying more free time to travel, participate in hobbies new and old, and spend more time with friends and family. A true win-win.
Semi-retirement is a way of testing the waters, allowing you to ease into retirement life instead of making a drastic lifestyle shift. It also gives you time to determine what works and what doesn’t work for you in retirement, allows you time to build up healthy physical, mental, and social habits, and establish a new routine and sense of purpose.