Phased Retirement

Man and woman sitting with glasses of red wine looking at each other and smiling while talking about Pension freedoms and Phased Retirement


MoneyPlus Features Team

18th December 2015 at 12:53pm

A phased retirement could be good for you

The time has finally come and you’re ready to retire. You might have been waiting for this day for years or maybe you don’t feel ready to give up your career – after all it’s been a huge part of your life.

Whatever your personal feelings on the matter we’ve got some tips to help ensure your transition into retirement is as healthy and seamless as possible.

The question isn’t at what age I want to retire, it’s at what income

Avoid going cold turkey

Just like abruptly quitting an addictive drug, removing yourself from the workforce in one fell swoop could have negative effects.

Along with the usual financial worries that come with retiring, many people also struggle to adapt to the change in routine.

Studies even show that millions of couples find it to be a strain on their relationship – with a few finding it impossible to live together.

Whether you’re in a relationship or not it could be a good idea to find a hobby, this means you’ll be able to spend time doing something you enjoy during your retirement and won’t find yourself at a loss for things to do.

Go part-time

According to experts, the best way to transition into retirement is to gradually ease yourself into it by weaning yourself off full-time employment over time.

Why not think about reducing your hours in the years leading up to retirement?

Many employers will let you switch to a phased retirement track, working part-time and gradually cutting back those hours until you’re ready to retire completely.

Ask your employer about the possibility. You might be surprised by the answer.

Plan ahead

If you’re organised in the years leading up to your retirement you’ll give yourself a much better chance of a successful retirement.

You’ll also be mentally preparing yourself for what the future holds.

It’s a good idea to start planning your exit from the workforce at least five years in advance. If you can start planning a decade in advance that’s even better.

You should also think about planning your retirement with your family.

As well as tackling financial support issues to better meet your family’s current needs and priorities this is a good chance to plan the more enjoyable things you’ll be doing in retirement.

Sharing ideas and socialising with supportive family or friends can be key to staying healthy. So make sure to pave the way for an active social life in retirement.

If you do the planning ahead of time and realize that you need to recalibrate your original vision, then you can work longer or save more aggressively

Work out how much you’ll need

This is really important so make sure you figure out how much money you’ll need for your retirement, as George Foreman as famously said: ‘the question isn’t at what age I want to retire, it’s at what income.’

Whether you’re planning a luxury trip around the world or just want to maintain your current standard of living, you need to have a good idea of how much you’ll be spending.

If you’re nearing retirement and don’t think you’ve got enough to last you, you might want to think about amending your plans.

According to Maria Bruno, senior investment analyst at the mutual fund company, Vanguard: ‘If you do the planning ahead of time and realize that you need to recalibrate your original vision, then you can work longer or save more aggressively…That gives you time to work toward that plan so you can fine-tune it.’

Try our handy calculator to help you figure out how much you’ll need in retirement. And remember, the more time you have to arrange your plans, the more prepared you’ll be for retirement – financially and mentally.

Join the conversation

How are you planning for retirement?

We’d love to hear from you. Join the conversation and follow us on twitter @StandardLifeUK and Facebook.

The information in this blog or any response to comments should not be regarded as financial advice and is based on our understanding in December 2015.