My friend's father retired late last month, and after an almost 50-year career, he deserved it. My friend threw a party a bunch of us attended, and I had an opportunity to talk to her dad about his upcoming plans.
His first order of business was to take a much-needed vacation. But beyond that, he frankly seems to have no idea what he's going to do with his time. And while he didn't seem all that daunted, I'll admit that I'm a little nervous for him.
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My friend's father upheld a pretty demanding schedule while he was working. So he may initially be looking forward to some downtime. But I think he's going to have a difficult time adjusting to retirement because he took the "hard stop" approach instead of easing in.
Why the "hard stop" approach could be disastrous
When I talk about a "hard stop" approach to retirement, I mean going from a full-time work schedule to not working at all. A lot of people who retire go this route, so it's certainly nothing new. But I find it unsettling.
If you're someone who's used to working all the time, when you're able to take a week or two off for vacation purposes, it's really nice. But beyond that, there's the serious potential to get bored very quickly. And that could wreak havoc on your mental health
I'm worried that this will happen to my friend's father. Right now, he's in what I call the honeymoon stage of retirement. He just ended his career so it's too soon for him to really feel bored and restless. Plus, he had a nice vacation to enjoy and with the holidays upcoming, it's going to end up being a reasonably busy month.
But what's going to be come January? Will he still be content with his new schedule (or lack therefore)? That, I wonder.
And that's why I feel like a much better way to kick off retirement is to ease into it. Instead of going from full-time work to zero work, scale back gradually.
That could mean going from 40 hours of work per week to 30 one year, and then 20 the next, and so forth. Or, it could mean working part-time for a couple of years before fully retiring.
Now you may be thinking, "That's a nice fantasy, but not every employer allows that." And I totally get that.
But remember, with the gig economy, older workers have more options than ever when it comes to phasing into retirement. If you have a job where going part-time isn't an option, you could look to consult in your field instead of working full-time as a salaried employee. Or, you could work part-time on a freelance basis in a totally different capacity. There are really so many choices to explore.
The "hard stop" approach might hurt financially, too
Another reason I don't like the idea of going from full-time work to none at all? Many people don't realize how expensive retirement has the potential to be.
If you stop working and immediately start raiding your savings to pay your bills, you might end up whittling down your 401(k) or IRA sooner than expected. And that's not something you want to do, as it could mean finding yourself with no savings left later in life.
When you ease your way into retirement with part-time work, you still get a paycheck. It might be a much smaller one than what you're used to, but it's a paycheck nonetheless.
That eases the pressure on your savings. It might also allow for a delayed Social Security filing, which could result in a higher monthly benefit for life.
Hopefully, my friend's father will find ways to stay busy now that he's officially a retiree. And if not, the option to go back to work in some form exists, too.
But still, I think a more optimal approach to retirement is easing into it by cutting back on working hours rather than doing a full stop. In time, hopefully more and more employers will support older workers in making that transition. That could make it a lot easier to take a phased approach that might ultimately offer mental and financial benefits.
