Could Partial Retirement Be Right For You?

There is no linear path to retirement. It is a significant change and will look different for everyone once the time comes. Leaving the workforce can alter your life in all sorts of ways, from a financial standpoint to your mental and physical health. Not only do you have to take time to understand Medicare insurance, but you also have to get used to this new transition.

Because this change can feel so abrupt and affects several aspects of their lives, many seniors weigh their options and opt for partial retirement. Sometimes it’s hard to let go of the work-life!

Partial retirement offers seniors a way to reduce their costs of retirement while still giving them more time and control over this new phase of their lives. It’s often a great way to transition to full retirement. So, let’s talk about this option and see if this might be something for you to consider.

What is partial retirement? 

If you’re considering partial retirement, you want to understand what you’re getting yourself into (not everyone likes surprises!) Partial retirement means you might be around the typical age for retirement and still have some form of continued employment at a reduced level.

Individually, this will look different for everyone. For you, this could mean working reduced hours at your current job or elsewhere or investing in your side job idea to create supplemental income. You’ll be working part-time hours to increase your income and reduce costs during your retirement years.

What qualifies as partial retirement? 

One of the positive aspects of partial retirement is that you are not limited to only working decreased hours at your current place of employment or a local place hiring for part-time work. You can turn a side hustle or passion project into a business idea or have part-time work hours while making money online. The possibilities are abundant! Here are a few to give you an idea of the various ways you can make the most out of partial retirement:

Creative Arts Idea

Multiple things under this category can fulfill the title of part-time work. You could play music at a restaurant, bar, or event. You can set your schedule and book yourself to play as much or as little as you want.

Investing in yourself by funding a passion or talent is another way to earn some extra income. Consider selling your work on an E-commerce site like Etsy or Facebook Marketplace. Many people find success in selling their pottery, woodwork, knitted work, and other handmade items online.

Coaching/Teaching 

There’s always a need for more coaches and teachers, especially with the youth. If you enjoy helping others learn and grow, consider a job as a part-time coach, teacher, or tutor. This choice allows you to help make a difference in the lives of others and put more money in your pocket.

Freelancing/Consulting 

Taking up freelancing or a part-time consulting job can be a very fulfilling and flexible way to earn extra income and work reduced hours. Various job fields are out there looking for people with the right expertise.

You can take your knowledge and skills in areas like finance, marketing, IT, supply chain, healthcare, and more and only work part-time. Becoming a contract worker might work better for the daily life you want during your partial retirement too.

Gardening/Landscaping 

Many seniors enjoy spending their time outside and working with their hands. Hobbies like gardening and landscaping are great choices, whether you want to engage in them as a hobby or if you want to make some money doing an activity you know you enjoy.

Reduced Hours at Your Present Job

If you are content with staying at your current job or at least in the same job field, you can certainly choose to continue working at a part-time rate! This transition can be easier than diving into a new field or starting a business, and it offers you the same benefits, like fewer hours and extra income.

Benefits to Partial Retirement

I know working during retirement doesn’t have as good of a ring to it as relaxing and traveling all the time. However, I promise there are still many benefits to this whole partial retirement thing! What you want to make sure of is that the benefits of this decision outweigh the less exciting parts of it.

Here are some of the positives:

• Extra money to help with your cost of living, for traveling, and to use freely for your interests
• It keeps you busy and with something to do
• It helps you stay socialized
• Partial retirement can help improve your mental health, reduce loneliness
• Improve your physical health by helping you stay active
• Lower your risk of developing unhealthy behaviors
• A chance to learn new skills

Is Partial Retirement right for me? 

How do you know if partial retirement is the right move? Let’s talk about it. If you’re even semi-interested in partial retirement, you most likely fall into one of these two categories:

1. You want to work 

If you think you fall into this category, your choice to be partially retired life might be for these reasons:

• Wanting to learn a new skill or complete a challenge
• Earn more money to fund your travel wishes or hobbies
• Taking your passion project and creating a business idea that produces income
• Experience the social interaction that comes with working or starting a business
• Working-part time helps you stay active and engaged

2. You need to work for the extra money 

You might fall into the category of partial retirement being the best decision for you financially and realistically. These are just a few of the reasons you might be considering this decision under this category:

• Need more income for your living expenses
• Extra money can help you pay down your debts
• You need to support your loved ones financially
• Unforeseen and expensive medical costs

Full retirement may be everything you ever dreamed it would be or not exactly what you imagined. Your eagerness for retirement all these years might lead you to get bored quickly or stressed about finances. Partial retirement offers you the chance to have a better game plan and understanding of what full retirement will look like specifically for you and what it entails. You can see what having more free time is like and how you can use it for maximum fulfillment.

What does partial retirement mean when it comes to Medicare? 

More often than not, part-time jobs won’t offer part-time employees health coverage. Being partially retired, you will likely enroll or already be enrolled in Medicare. However, suppose you do get the chance to have creditable active employer coverage again. In that case, you can choose to disenroll from Medicare until you retire or lose that active employer coverage.

Your Medicare insurance will be business as usual if you opt for partial retirement. Your coverage does not change because you are engaging in part-time work.

Still, I want you to know that if partial retirement lands you on a payroll, you will still pay the Medicare tax. I get it, trust me. It seems strange to have to pay Medicare taxes when already on Medicare, but unfortunately, that is the rule.

Social Security and Partial Retirement

Now, if there aren’t really any changes to your Medicare, what about Social Security?

Partaking in partial retirement can help you boost your Social Security benefits! If you have a part-time job or side hustle that supplies you with a livable income, you can postpone your Social Security benefits and increase the amount of money you’ll get when you start receiving your payments.

For example, those born in 1960 or later have their “full retirement age” marked at 67. You can receive Social Security benefits as early as age 62, but the amount you receive will increase if you reach your full retirement age before taking in benefits. Partial retirement offers you the chance to buy more time before you pull the trigger on Social Security.

Making the Workforce Work for You

The most crucial part is that this decision is yours alone to make. There is also no set time you must decide by either. You can do partial retirement after spending some time as a full retiree or transition to part-time work once you’re ready to leave full-time employment. Reflect on yourself to determine what you want this next phase of your life to look like, even if it is only for a little while.

This decision or process does not have to be stressful! If you work with my team here at Boomer Benefits to set up your Medicare insurance, we will always be here to answer any questions you have, including what to do if you go back to work. We are just one phone call away!

Key Takeaways

• Partial retirement might be the right option if you want to continue working, but not full-time, or if you need additional income.
• There are many benefits to partial retirement, and it should not affect your Medicare benefits unless you were offered creditable coverage and wish to change.