Most workers, given the still fragile economy, are trying to hold on to their jobs, not ease out of them. But as nest eggs begin to recover, many of us will begin thinking again about when and how to walk away from work. As such, phased retirement is l

In a continuation of their previous article about test-driving your retirement plans, SmartMoney recently offered a reminder about the prospect of a transitional retirement – which may be the best way for some to leave the workforce.

Retirement doesn’t have to be a climactic stopping point, where yesterday you were working full speed ahead and today you’re at full stop. From a financial planning standpoint, it’s difficult to transition from a full working income to a retirement income – especially if your retirement accounts took a recessionary hit. From an emotional standpoint, the abrupt lifestyle adjustment may be difficult to manage.

Transitional retirement may be one solution. For some this means retiring from their old job and taking on a new part-time job. For others it may be smarter to stay with your current job and simply cut back a bit on your involvement. With the prospect of a transitional retirement, there are essentially two questions: “How should you transition?” and “How do you sell it to your boss?”

For your own sake, you’ll need to assess your goals and your financial needs. As you work less you’ll probably earn less, which means you can ease into a retirement budget gracefully. Of course, you have to figure out how to work less. One option may be to become an independent consultant for your current employer.

When it comes time to broaching the subject with your employer, think in terms of mutual benefits. Your employer needs to know why you need to begin the transition, and why it’s better (for them) to keep you by any means possible. To your advantage, many companies right now are hurting for talented experts, and cautious of hiring new full-time employees. You may be solving their problems by offering to provide your expertise on an as-needed basis. A transitional retirement also gives the company time to set up succession plans, find the right person for your job, and give that person time to get up to speed on company policy, protocol, and learn the tricks of the trade, so to speak. Don’t hesitate to point out these benefits to your employer during your discussions.


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