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So Many Ways to Retire

Retirement as we've known it is changing.

The days of working for the same company for 30 years and getting a pension for life are certainly over for most Americans, whether because of increased worker mobility or decreased pension security.

But many people are questioning the very notion of retirement, wondering whether they even want to spend the last couple of decades of their lives engaged in full-time leisure. In fact, a survey by Princeton Survey Research Associates found that two-thirds of the over-50 crowd plan to work in retirement -- most for reasons other than money.

Sure, you could just quit and never work again. But that's just one way to retire, and maybe not the best way for you, especially if there's a part of you that still wants to work or if your finances may not be quite ready to sustain you full-time.

Why should you consider a part-time retirement? Here are some of the benefits:

  • You can retire (at least partially) earlier. Your retirement benefits and portfolio may not be enough to live off of right now, but factoring in a part-time salary might allow you to work just three days a week -- or spend a few months in Florida each year.

  • You'll need less from your nest egg. This will make it last longer, and it could be worth more for your heirs.

  • You may receive other benefits, such as health insurance, dental care, vision care, a flexible spending plan, and a 401(k) match.

  • If you join (or continue with) an employer that offers a defined-benefit plan, you may increase your pension check in retirement. (On the other hand, going from full- to part-time may reduce your pension payments, so check with your human resources folks to get the details.)

  • You might increase your Social Security benefit. Even if you have begun receiving your monthly check, the Social Security Administration will automatically adjust your benefit upward if your current income counts as one of your highest-earning years.

So what are your options? Here are some of the many ways to retire:

1. Phase into retirement. Gradually scale back your hours, perhaps taking time to tie up loose ends and train your replacement. This will also allow you to ease into the next phase of your life, rather than going cold turkey on work.

2. Demote yourself. Perhaps you like your line of work but you'd like to cut back on your responsibilities -- and stress. Consider moving to another position in the company, something that allows you to leave the office behind when you go home.

3. Work on a project basis. Rather than thinking of work in terms of hours (e.g, 30 hours a week), take on projects that allow you to be flexible with your time. Maybe it's spearheading a marketing campaign, or upgrading a system, or developing a training program -- however your expertise translates.

4. Do something seasonal. Many industries need more help at one time of the year. Retailers need more smiling faces during the holiday season. Holiday spots need more help during the tourist season. Stadiums need more help during football season. Farms and nurseries need more help during farming and nursing seasons. Deer need more help during hunting season. What seasons are in your area?

5. Team up to create a full-time job. Perhaps you want to work part-time for an employer who needs a full-time employee. Work with other like-minded folks to create a full-time position. For example, let's say you'd like to teach high school math, but not all day or just one semester. Find someone who'd be willing to work the other periods or semester and present yourselves as the full-time package.

6. Work only as needed. Plenty of businesses need temporary or emergency help. Find a temp agency that specializes in your line of work. Or sign up to be a substitute teacher. Or provide emergency babysitting for families when the regular caregiver is sick or on vacation, or school has been cancelled but the parents can't stay home.

7. Be the local handyperson. Chances are you've developed some useful skills over your life -- fixing cars, stopping leaks, building porches, writing articles, growing gardens, playing piano, debugging computers, and so on. You might be able to turn those skills into occasional employment, whether working on your own or offering your services to businesses.

It won't just happen
Whatever route you take to retirement, smart planning right now will smooth the ride -- and ensure you'll get to where you want to go.

How much retirement income can you expect from your current sources? How much will you need to live on? How much will have to be made up with part-time work? These are the questions you should be answering now in order to create the retirement you want. A survey conducted by investment company TIAA-CREF found that 55% of people near retirement expected their expenses to fall, yet only 30% of retirees experienced such a drop. On the other hand, less than 8% of those close to retirement expect their expenses to increase, yet 20% of retirees found themselves spending more than they did when they were working. Not surprisingly, the retired respondents who spent the most time developing a financial plan were much less likely to be spending more in retirement than they expected.

So start planning now. You can begin by taking a 30-day free trial of my Rule Your Retirement newsletter service.

When Robert Brokamp retires, he plans to finally clean up his room.The Fool has adisclosure policy.


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