Retirement is changing.
For years, the traditional idea was simple: pick a date, stop working, and move fully into retirement.
But today, many people are taking a different path.
According to a recent Fidelity study, 61% of respondents are moving away from the “hard stop” approach and instead transitioning into retirement gradually.1
While many choose to simply scale back hours at their current jobs, this chart highlights four other ways people are approaching retirement:
Chart Data Source: Fidelity
Among all study respondents, the top retirement transitioning alternatives include gig work and side hustles (35%), starting a small business (29%), consulting part-time (26%), or switching industries altogether (20%).
Retirement Isn’t Just a Date on the Calendar
For many people, retirement is becoming more of a transition than a single decision. This often requires thoughtful planning across both personal and financial areas, including:
- Defining Your Purpose: Determine exactly how much daily structure, flexibility, intellectual stimulation, optional income and engagement you need.
- Optimizing Income & Flexibility: Even modest part-time income can reduce portfolio withdrawals while creating more flexibility around taxes and portfolio growth.
- Controlling Portfolio Withdrawal Timing: An adaptable transition can help protect your portfolio from sequence-of-returns risk, minimizing the need to sell assets during market downturns.
- Reducing Anxiety: A phased transition allows you to ease into retirement gradually instead of feeling pressured into a sudden life change.
Overall, retirement is a series of choices, not a single decision.
We explore how to navigate this process and what the “4 Phases of Retirement” look like in our post: How to Make the Decision to Retire
Keep in mind, there’s no “right” way to retire.
However, if it’s top-of-mind for you, reach out as soon as possible. The earlier we plan, the more financial flexibility you’ll likely have.
–David Bunker, Financial Advisor & Licensed Fiduciary
Before You Go
Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.
Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.
This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.
Source:
1) Fidelity Investments® Study, https://newsroom.fidelity.com/pressreleases/fidelity-investments–study–72–of-americans-say-they-will-retire-on-their-own-terms-as-they-embrac/s/609fbcb7-3ea5-4773-a300-0659da881d2a
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