4 Ways to Retire: Which is Right for You?

retirement Sep 8th, 2020 by: Darryl Lyons

Can I retire? There are 3 parts to this question if you want to live the dream retirement you had hoped for.

  1. Do I have enough to retire?
  2. What will I do in retirement?
  3. How will I retire?

We’ll address the last question here. You may not know it, but you have options.

Research shows that more than half of those nearing retirement age plan to stop working entirely. But, as it turns out, punching out for the last time and saying one final farewell to your working years isn’t a long-awaited dream come true for everyone. It can be a psychological jolt, after following basically the same routine for almost your entire life – get up, get dressed, go to work, come home, make dinner, go to bed. For some people, suddenly not having to do it anymore can feel kind of like hitting a brick wall at 60 mph.

For anyone who falls into the latter group, retirement may need to be a more gradual transition from working full-time to being fully retired. For those who just aren’t ready to give up the purpose and occupation of time that having a job provides, they may need an alternate plan altogether, maybe deciding to trade one full-time gig for another, spending their retirement by starting their own business.

The right way to retire will also depend on how you answer that first question: Do I have enough to retire? Especially in today’s environment, when the Coronavirus pandemic has changed many aspects of life, retiring when you had originally planned may not make financial sense. Working part-time or starting a second career may be a necessary solution.

About 17 percent of retirees plan to phase into retirement and another 27 percent say they plan to work part-time.

The good news is you have options. Talk with a financial advisor about your specific situation, concerns and goals for retirement to determine what option works for you. Remember, the dream retirement isn’t the same for everyone.

 

However you plan to retire, make the transition into retirement a smooth one. Contact PAX Financial Group to see how we can help.

 

Phase Into Retirement

When the calendar and your 401(k) balance say it’s time for you to retire but you’re just not ready for that brick-wall full-stop, gradually easing into full retirement may be a better route for you.

Phasing into retirement is essentially taking on less and less work and eventually freelancing or consulting part-time before pulling the plug altogether. It allows workers to slowly adjust the scales from work time to free time. It can also be a good way for older, more experienced workers to offer guidance and share their knowledge and experience with others. Not to mention, it can allow you to continue to bring home a paycheck, take advantage of employer-sponsored healthcare benefits and contribute to your retirement plans for a longer period of time.

Some employers are even starting to offer official programs that allow employees nearing retirement age to begin working fewer hours so they can transition slowly into retirement. The benefit to employers is it allows older workers to fully train their replacements or transfer their knowledge to coworkers before walking away completely.

If your employer doesn’t offer a phased retirement program, you may be able to take the knowledge and experience you gained during your working years and use them to coach or consult.

 

Retire and Work Part-Time

For some people, no longer needing to work for the paycheck can make work more enjoyable. In this circumstance, taking on a part-time job can offer some much-needed social connections, as well as a sense of accomplishment and self-worth. It may also be rewarding to go to work at a job you want to do, whereas you may have just spent 40 years working at a job you had to do.

If you can find a part-time job somewhere you already frequent, like a craft warehouse or home improvement store, or doing something you really enjoy, like working with children or baking, congratulations! The extra income will just be the icing on the cake!

There are factors to consider when working in retirement. For more on this, read our recent blog post: How to Structure Your Day in Retirement: Should It Include Working Part-Time?

 

Retire and Start Your Own Business

Have you always dreamed of being your own boss? If you can leverage a hobby or skill into a small business, you might be able to make that dream come true in your “retirement” years.

Starting a business can be a great way to fill your time, add to your retirement income streams, keep your mind sharp and your body active, and possibly give you a way to pass on your skills to a younger generation.

Is this what the dream retirement looks like for you?

 

Retire Fully

On the other hand, you may be someone who is prepared and ready to sail off into the sunset. Some people thrive with idle time, or have hobbies they want to focus on, trips they want to take and family they want to spend time with.

If your financial projections indicate that you can comfortably afford to retire and you have a clear picture in mind of what you’ll do and how you’ll spend your time in retirement, go for it.

 

Important in Any Scenario

One thing of important note: If you do choose to keep working in some capacity after you reach full retirement age (the Social Security Administration defines this as between age 66 and age 67, depending on your birth year), you should be aware of how any income you earn can potentially affect your Social Security benefits and tax situation, and possibly even your health insurance or Medicare coverage. You’ll also still be required to take Required Minimum Distributions (RMDs) at age 72, regardless of whether you’re working full-time, working part-time or are fully retired.

If you’re not sure what you should do – or what you can do – as far as retirement is concerned, contact PAX Financial Group to see how we can help.

Also, remember to slow down a little and take some time for yourself. A lot of people work all their lives to be able to stop and smell the roses. Don’t keep working so long and hard that you miss out on all of the wonderful things retirement has to offer, no matter how much you love what you do! What does the dream retirement look like to you?

New call-to-actionThis material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

Darryl Lyons

Darryl Lyons

CEO and co-founder of the PAX Financial Group, Darryl Lyons has been a licensed professional in the financial services industry since 1999. A lifelong Texan, Darryl began his career in the financial sector just one day removed from earning his bachelor’s degree in corporate financial management and accounting at St. Mary’s University. Throughout his career, he has won awards for recruiting and development from Fortune 100 companies. In January 2007, he chose to begin and develop his independent practice. He joined Andres Gutierrez and Joseph Schuetze to form the PAX Financial Group. Darryl also served as the Chairman for Brooks Development Authority. Shortly after his service, Mayor Julian Castro, named a park “The Darryl W Lyons Park” in honor of his service. He was named to the 2010 San Antonio Business Journal’s “40 Under 40 Rising Stars,” which honors people making a difference in business and in the community.