Staggered or phased retirement

Giving up the 9-to-5 doesn’t necessarily mean stopping work. There is the option of a staggered or phased retirement.

When you picture yourself in your golden years, are you:

  • sitting on a beach,
  • hitting the golf course,
  • or still working behind a desk?

For many people of retirement age, continuing to work is an option they are considering. Increasingly people are planning to stagger work or work flexibly. This can really appeal to some individuals who have caring responsibilities or health issues.

Sudden transition from working five days a week

Several decades ago, working and retirement were binary terms, with little overlap. People were either working (and under the age of 65) or had hit the age of 65 and were retired. That’s no longer true however, as staggered retirement is becoming more popular and more common.

Few people benefit from the sudden transition from working five days a week to not working at all. Retirement can be an unsettling period, as the most common path into retirement is to simply stop working.

More flexible retirement and working part-time

New research has highlighted the fact that fewer people are deciding against completely stopping working and are opting for a staggered and more flexible retirement and working part-time.

Nearly one in three (32%) pensioners in their 60s and 16% of over 70s have left their pensions untouched. And of those who haven’t accessed their pension pot, nearly half (48%) of those in their 60s, and 24% of over-70s, say it is because they are still working.

With people living longer, and the added prospect of health care costs in laterlife, retirees increasingly understand the benefits of having a larger pension pot in later life.

Pensions are required to last as long as possible

Of those who haven’t accessed their pension pot, half (51%) say it is because they are still working. While more than a quarter (25%) of people in their 60s say it is because they want their pensions to last as long as possible.

Of course, retirees who haven’t accessed their pension pot must have alternative sources of income. When asked about their income, nearly half said they take an income from cash savings (47%), others rely on their spouse or partner’s income (35%) or State Pension (22%) while 12% rely on income from property investments.

Offering people different financial and health benefits

This trend for staggered retirements offers many financial and health benefits. It is taken for granted that continued good health is one of the best financial assets people can have. The benefits of working – such as remaining physically active and continued social interaction – can make a big difference to people’s mental wellbeing and overall health in retirement.

People are increasingly making alternative choices about retirement to ensure that they do not run out of money, but it’s also really important to make pension savings work past retirement age. This is so as not to miss out on the ability to generate growth above inflation for when there is the requirement to start drawing a pension.

 

Other articles:

What to do in retirement – great ways to spend your time

Can money really buy you happiness?

Guide to securing your financial future

 

Source data: [1] Research from LV survey of more than 1,000 adults aged over 50 with defined contributions

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