An Exciting New Retirement Option

//An Exciting New Retirement Option

An Exciting New Retirement Option

For Mark Roberts’ Use: In 2014, in response to economic conditions and employee feedback, the federal government launched a Phased Retirement option for their workers. Due to the success and popularity of the program, some private sector companies are following suit. A 2017 study found that about half of large employers are aware of employee interest in a phased retirement program, while approximately one-third (31 percent) are currently offering a similar option.

While formal “phased retirement” programs are still not overly common, many companies allow workers to pursue an approximate experience in one way or another. It is likely this option will continue to grow, along with demand.

How it works.

Those pursuing a phased retirement often report several motivations. First, they desire to reduce their work hours, level of responsibility, or some combination thereof. Second, these workers are interested in retiring within the next few years, potentially, but are worried about the financial transition to a fixed income. They might also feel concerned about the lifestyle change, and wonder whether they will miss the fulfillment of a career.

A phased retirement addresses all of these concerns, but can work in different ways depending upon your company’s offerings. For example, Person A might prefer to reduce their work schedule to three days per week, to avoid stressful commutes. Person B might be fine with the commute and work hours, but prefer to shift into a lower-stress position and shift their attention toward mentoring younger workers. Of course, in both situations either fewer hours or less responsibility might be exchanged for a lower pay grade, which can help anxious employees transition gradually into retirement by “trying on” their new budget.

Is a phased retirement right for you?

Even if your company does not offer a formal phased retirement option, it is often possible to negotiate such a position by matching your own concerns with needs within the company. Employers tend to value the experience and wisdom of their older workers, and are happy to keep them around in some capacity rather than sending them off into a sudden retirement.

If you do decide to pursue this option, we would caution you to carefully investigate your benefit options such as health insurance. Make sure to maintain coverage if you’re under 65 and not yet eligible for Medicare. And, of course, take steps to keep your retirement savings plan on track. Give us a call if you’re considering a phased retirement, and we can help you investigate your options and draft a transition plan for your new lifestyle.

1) Federal News Radio, June 28, 2017
2) Transamerica Center for Retirement Studies, 2017
3) Society for Human Resource Management, 2017

By |2018-11-26T08:14:51+00:00November 26th, 2018|Retirement|0 Comments

About the Author:

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.