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Testing the Waters

Dan McDermott

AT THE PUBLIC POOL where I swam growing up, each hour’s mandatory safety break ended with the announcement that, “You may slowly reenter the water.”

There were two kinds of swimmers during those hot, humid Iowa summers. One group didn’t even hear the entire announcement. They were already enthusiastically running, yelling and jumping feet-first into the pool. The other group walked to the pool, tested the water with one foot and then waded in bit by bit, gradually getting used to the temperature.

Traditionally, most people have thought of and planned for retirement as a defined event. But like my fellow swimmers from childhood, there are different ways to approach it. From my reading and research, along with conversations with colleagues, friends and former classmates, I’ve come to view retirement as more of a process than an event.

I’m an advocate for planning a phased retirement. Begin to reduce your commitments to work and career over time to better orient yourself to what your retirement might be like. Less time devoted to your career leaves more time to test out retirement experiences, reassess your expectations and make changes as needed.

Over the past two years, it seems we’ve heard even more about retirement than usual. Some workers were forced into a sooner-than-planned retirement due to COVID-related furloughs and layoffs. Some opted out of the workplace for a variety of personal reasons. Many others are vague on their plans. They talk of “working just a few more years and then I’ll be done.” But there’s no clear timeline and it seems as though they’re just postponing decisions.

Even the terminology can be confusing. While the term “retirement” is well-accepted, most attempts to describe something more flexible have fallen flat. Unretirement? That doesn’t work for me. It sounds like you retired too soon, didn’t know what to do and went back to work fulltime. Semi-retirement and other phrases like it sound both passive and static.

In a less-than-scientific poll, I asked readers of my blog to vote on the term that best describes a gradual, planned shift from work to retirement. About 50 responded. The winner by a wide margin was “phased retirement.”

Phased retirement is an approach to retirement that’s actively planned and managed. It allows you to look at and experience all aspects of retirement before, ahem, taking the plunge.

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The focus shouldn’t be on the financial aspects alone. While those are important, most retirees I’ve spoken to were well-prepared financially but failed to plan for and adapt to the social, physical and mental aspects. Contrary to the advertisements, retirement is not just golf and dinner out with friends every day. There’s a lot of time to fill.

My research and thinking about my own retirement goals started more than 10 years ago while I watched a mentor navigate the process. He modeled every step. Some of it was planned, but oftentimes he encountered some new life situation that caused him to think anew. But since he was “phasing” his retirement, it was never a major change. Just a course correction.

When I asked him how he was easing back on his professional career, he used a metaphor. He talked about landing the plane slowly and smoothly before arriving at the gate.

He held leadership roles as a fulltime employee at several large companies. His first phase was to retire from a large company to join a consulting company that could market his skills. It was fine with him if he didn’t always have work. That was a part of his plan to wind down his working hours and begin to explore other interests. Eventually, he took on only certain projects and, near the end of many years of transition, he would take on projects for only one specific client.

Start planning your phased retirement now. Could you reduce your workload at your current employer? Or would you prefer a clean break with some time off followed by part-time work? What will you do to make your additional free time productive and enjoyable? If you put off exploring other interests, like travel and adult learning, you may find someday that you have little time or energy left to embrace them.

Planning for these changes in a phased way could help you minimize any disruptions to your lifestyle, and help you better acclimate and embrace the changes.

Repeat after me: “You may now slowly enter the water.”

Dan McDermott is an information technology executive in Minneapolis. He and his wife Sarah split their time between Minnesota and Arizona. They have two grown children. Dan works hard to learn about cryptocurrency from his son and Instagram from his daughter. Going for a long, leisurely run is his precious thinking time. Check out Dan’s blog.

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Rob Jennings
Rob Jennings
1 month ago

I struggled to the finish line in the corporate world and planned to be done with working for money. After one long vacation, I started thinking about carving out the parts of my job I enjoyed and doing some part time consulting. That was 4 years ago and it has worked out pretty well. My wife and I still have time to do almost of the activities we wanted to do, and have a bit of extra cash for the occasional splurge, not to mention more put away for retirement and not spending from the retirement accounts while delaying SS.

Dan McD
Dan McD
1 month ago
Reply to  Rob Jennings

Rob – you’ve highlighted a couple of the areas that seem to resonate most. Focusing on the aspects of your work/career that you enjoyed the most, while also augmenting your investment accounts with supplemental income. I’m glad it’s working well for you both.

DrLefty
DrLefty
1 month ago

My husband and I have been thinking about this a lot. We turn 62 this year and are looking at a 3- to 4-year timeline toward retirement. He’s already talked to his boss about starting to scale back his hours starting next year.

I don’t have a formal phased retirement option, but there are ways I can cut back on my work as a university professor. I’ve been in management (department chair) for the past four years, but I’ll be out as of July. I have a book project due May 1, and once that’s out the door, that will be my last book. After 25 years of service, I’m going to resign from the editorial board of a journal at the end of this year. I’m going to focus my professional energy on mentoring younger colleagues and graduate students who are the next generation.

In my case, it’s less about “phasing” retirement and more that I’m pretty burned out after over 30 years of pushing hard at this career. I have no trouble imagining how I’ll fill my time once I’m retired. I figure as long as I still am motivated by teaching and advising students, I’m worth my paycheck, but if I find I’m losing interest in that, too, it will be time to go.

Dan McD
Dan McD
1 month ago
Reply to  DrLefty

You’re not alone in thinking about this! But you seem to be ahead of most by beginning to implement your phased retirement. Many have a timeline in mind but don’t have the discussion with their employer like your husband has. Or put in place discrete steps to lessen the workload like you’ve done; I love your concrete examples along with where you intend to focus your energy. Well done!

Last edited 1 month ago by Dan McD
Jo Bo
Jo Bo
1 month ago

Thanks, Dan, for helping frame the benefits of phased retirement. I signed a phased retirement contract four years ago and have one month left to go. There have been benefits, certainly, but I would not do it again. For one, the work load never truly goes away and the meeting schedules and workplace communications center around full-timers. And because I have a well-known termination date, I’ve found diminished interest in my ideas and suggestions at work.

The plus side? Phased retirement seems to be a good window into full-time retirement, especially on the financial side.

Dan McD
Dan McD
1 month ago
Reply to  Jo Bo

I appreciate the insightful comments from someone who’s going through this and nearing completion. It’s a good reminder to the rest of us as we structure our phased retirement and what the day-to-day aspects of that should look like.

BenefitJack
BenefitJack
1 month ago

Dan, thanks for posting the WSJ article. Unfortunately, there are still too many barriers to employers when it comes to flexible/phased retirement/employment. And, while the age to commence was lowered from 62 to 59 1/2, most Americans never had a pension plan and most never will. Others never vested, still others saw accruals frozen or the plan terminated.
It is not like a worker can count on their employer to embrace the concept without considering the added costs, potential benefits liability and human resources issues. We will know “phased retirement” has “arrived” for more Americans when employers embrace “flexible employment” and start to specifically adjust human resources policies and benefit plans to compete for experienced, “older” talent as new hires.

Long ago, my pre-retirement planning seminars targeted workers age 50. At the end of the session, I offered an example similar to “testing the waters”, titled “life is not a dress rehearsal for retirement.” https://www.psca.org/news/blog/life-not-dress-rehearsal-retirement-start-doing-some-those-things-you-are-dreaming-about Mike and Mary were my mom and dad.

Dan McD
Dan McD
1 month ago
Reply to  BenefitJack

Thank you for the comments. I agree there’s work to be done, but it’s encouraging to see this being discussed and written about as more companies work to retain their most valuable employees, regardless of age. I enjoyed the article you attached and the reminder to enjoy life now and not put it off for “someday.” I was sorry to read that Mike didn’t get that opportunity in retirement.

Andrew Forsythe
Andrew Forsythe
1 month ago

Good article. I was in a small law partnership so basically self-employed as we each decided our own workload (and thus earnings). I gradually began cutting back on work a few years before full retirement—taking on fewer new clients, avoiding more stressful cases, going in later and coming home earlier, taking off many Fridays, etc.

It worked well for me and I quickly realized I was going to enjoy full retirement. That has proven to be 100% true.

Dan McD
Dan McD
1 month ago

Andrew – thanks for the comment. It’s great to hear that you were able to make a phased approach to your retirement work out so well. Sounds just about perfect; congratulations!

Doug K
Doug K
1 month ago

we’ve had a spate of retirements at work – a combined century of experience with the company and its technology went out the door suddenly with just 3 people. The rest of us are struggling now.. I’d love to be able to cut back slowly, rather than grind out the 50hr/week until suddenly 0hr. How to sell this to corporations is the problem.

In any case I have dozens of volunteer and personal projects lined up for my retirement. The only problem I have is enough money to retire 😉

Dan McD
Dan McD
1 month ago
Reply to  Doug K

Doug – it seems you’re experiencing one of the key reasons companies may want to offer less than full-time work options. With an all-or-nothing approach neither side gets a gradual ramp down. Congratulations on having a backlog of activities that are “retirement ready.”

R Quinn
R Quinn
1 month ago

I am a long-time advocate of phased retirement as a benefit for both employee and employer.

Actually when the law was changed around 2008 allowing employers with a pension plan to pay the earned pension to employees who still worked part-time, I was an early adapter and eventually participant. We allowed a phased period of up to two years.

It helped with my transition to retirement and with showing the replacement the ropes. In my case the initial replacement didn’t work out and I was still on the scene to help starting the search over.

Needless to say there was an economic benefit as well, during the phased period I lived off my pension and invested the part-time earnings.

Dan McD
Dan McD
1 month ago
Reply to  R Quinn

It’s great that you’re an advocate, but even better that it’s worked well for both you and your employer. In a recent article the Wall Street Journal noted that programs like the one you participated in are on the rise: https://www.wsj.com/articles/part-time-retirement-programs-are-on-the-rise-11647336602

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