Semi-retirement is on the rise: Is it right for you?

You’ve just retired, or you’re starting to seriously consider it. You’ve got a slew of books ready to read and quite a few TV shows you’ve marked as “want to watch.” You even have a few hobbies you know you can rely on to fill some of your time. But you’re wondering … is that enough?

You’re not alone in that thought. Many retirees find that the things they had planned for retirement aren’t actually filling their time in the way they hoped. So, what do they do? Some opt for volunteering at local animal shelters, food banks or hospitals. But others go back to work, just not in the way you might be thinking.

What is ‘semi-retirement?’

Semi-retirement is quite simple. It’s when a person continues to work part-time after they’ve retired from their career. It looks different for everyone. Some retirees choose to simply scale back their hours at a full-time job, while others decide to work at local craft, grocery or clothing stores. Some even go into teaching or freelancing based on their work experience.

Why do people choose semi-retirement?

People choose part-time work in retirement for many reasons, but the most common ones are:

• Earning extra income for unexpected costs like medical care or a new vehicle.

• Building out a nest egg in the event of an emergency or death.

• Funding for excursions, vacations and hobbies.

• Seeking more social connections outside of home life.

• Regaining structure and routine in retirement.

• Wanting to stay active and mobile to help with overall well-being.

What are the benefits of semi-retirement?

One of the biggest benefits is the financial boost that part-time work gives you. The extra income can help with any number of things, including everyday expenses and payments that continue on after retirement. It can also help to stretch retirement savings further, meaning that the money you saved while working could last longer with part-time work.

But the benefits aren’t just financial. Many people choose semi-retirement for social and emotional health boosts. Having a social network that you stay connected to can help decrease feelings of loneliness, boredom and depression. Which leads to a higher satisfaction with life and finding more purpose in day-to-day activities.

Are there downsides to semi-retirement?

There can be, but it will depend on your personal financial situation. For some, there may not be any reason to worry, while others may need more time to consider their options.

1. Extra income can shift tax brackets, which could affect annual expenses.

2. If you’re not at your full retirement age, it could limit how much you can receive from Social Security.

3. Additional income can affect Medicare premiums. Depending on your income, costs may go up.

If you’re considering working part-time after retirement, be sure to consider all these factors. It may be useful to meet with a tax expert or financial advisor to discuss your specific circumstances before making a decision.

How do I know if semi-retirement is right for me?

If you find yourself looking for a little extra income for expenses or you’re itching to get back into a routine, semi-retirement could be the right choice for you. But only you can decide what your retirement should look like.

For some, that means traveling, volunteering or spending more time with family. For others, it means continuing to work a part-time job that brings extra income, new friendships or a renewed sense of purpose.

Whatever you choose, the best retirement plan for you is one that reflects your goals, supports your needs, and helps you create a fulfilling life for yourself and your loved ones.