When Is A Good Time To Clock Out Of Your Career?

No need to dive right into retirement

No alarm clocks. Not one more rush hour or inclement weather commute. Never another memo, meeting, report, review or deadline. The end of annoying coworkers and petty office politics. No boss.

If this is your vision of heaven, then you’re probably ready to clock out of your career for good. But quitting work cold turkey necessitates a major lifestyle change that can quickly turn into a version of hell.

An abrupt career halt can be especially tough on professionals, whose identity has long been intertwined with their occupation, sense of accomplishment and social interaction with peers, so they can easily end up bored, lonely, stressed or even depressed.

That’s why many seniors — who today are more physically active, intellectually sharp and living longer and healthier lives than ever before — are re-thinking retirement and making the big move to Leisure Land in gradual stages.

It’s called phased retirement, and the concept of winding down over time is catching on across the country.

The Society for Human Resource Management finds that 13 percent of national companies currently offer some sort of formal phased retirement plan, and that figure is already up 10 percent from just two years ago, according to grandparents.com. Those percentages will stay on the uptick as America’s rapidly aging population continues to surge.

Here in New Hampshire, a recent AARP study found that only a meager 10 percent of citizens who are 50-plus planned to leave work in the rearview mirror altogether and never return to the daily grind.

Nonetheless, the same report revealed that another 87 percent of Granite Staters in that age group worry that, once they finally have the time to enjoy a comfortable post-career lifestyle, they won’t have enough money to afford it.

Though the ideal scenario will be different for everyone, experts agree that the old rule of thumb still applies that you’ll need 80 percent of your preretirement income to live a lovely life of leisure. Moreover, it’s a certainty — like death and taxes — that healthcare costs will continue to increase exponentially, and unexpected expenses and emergencies can blow a big hole through even the most carefully crafted monetary plan.

What’s the antidote to those psychological and financial pitfalls attached to a career conclusion? Try easing into retirement.

Just like with your financial plan, retirement plans are no longer one-size-fits-all. If you’re not quite ready to trade full-time employment for a permanent vacation, you could cut back your hours and/or your responsibilities at your current position. Maybe you’d rather switch to a part-time job or seasonal work with a new employer. How about staging your second act by creating your own business?

The perks you get with each option include still earning income along with some benefits, allowing your retirement accounts to keep growing without tapping into them, and enjoying a more flexible work schedule, according to entrepreneur.com.

Even if your employer hasn’t yet put into place a formal policy for phased retirement, it’s well worth checking to see if you can still come to an agreement on an individual basis for a gradual and graceful exit. If reduced hours aren’t an option, a shift to an advisory or consultancy role, an extended paid or unpaid leave of absence, or perhaps a sabbatical can all be part of the discussion.

But be careful and be smart. Human resources pros warn that, before agreeing to anything that cuts your hours or alters your role with the company, make sure you understand how the change will affect your salary, benefits, pensions and future or current social security payouts. Also, everyone needs to be clear on what’s expected of you going forward.

Even better, be flexible. That creates a win-win for you and your company.

“As millions of boomers approach retirement age, more employers may begin to consider phased retirement in order to counter the anticipated impact of the ‘brain drain’ and loss of institutional knowledge. Phased retirement allows the company to continue to profit from seasoned talent while simultaneously transitioning younger employees into positions of greater responsibility,” writes Nancy Collamer, founder of retirement advice site My Lifestyle Career and author of “Second Act Careers: 50+ Ways to Profit From Your Passions During Semi-Retirement.”

Maybe you’ve decided that you’re done with working for someone else entirely. Start-ups are a rapidly growing trend among the senior set, who already possess a wealth of knowledge and experience and have acquired an extensive network of contacts. Creating a new business is especially attractive to those who have a spirit of adventure and the desire to manifest a long-held dream into reality.

“Absolutely,” says Sylvia Pierce, who teaches the course “Ageless Entrepreneurs: No Age Limits Here” through the Laconia Adult Education Program. “More and more people are realizing they’ve always wanted to do something very different from what they always did for work. That may be becoming a personal assistant, a personal chef, a personal shopper, a party and event planner or a home stager. They could want to coach or give lessons, have a food truck, be a craft brewer, be a baker or do whatever,” says Pierce. “It doesn’t matter what their dream is. People who come to class are passionate and overflowing with different and great ideas. They know they’re ready to try. What they don’t know how is how to get their business going,” she says.

Pierce said the first step is to discover where your passion lies and define what it is you really want to do now that you have the luxury of freedom from the demands of your old job. Next, determine how much money you need to cover start-up costs, how many hours you’ll have to put in, and whether your business can be internet click-and-order or must be bricks-and mortar housed in a traditional storefront.

Then there is the matter of whether you’ll need a loan, and for how much.

“No matter how great your idea is, never invest savings you cannot afford to lose,” she strongly advises.

Another piece of guidance from the experts is to be certain your spouse or partner is totally on board with whichever path you choose to ease out of full-time work. If you clash on ideas about retirement, income and lifestyle, conflict is created, and that sets up the potential for relationship disaster.

Fortunately, most of those who tried phasing into retirement have found it’s an ideal bridge to the next stage of life. And the beauty of it is that, should this turn out to be the roadblock to your happiness, you can always go back to working full time.

Learning to Plan Your Financial Future

Whether you’re still working, retired, easing into retirement or preparing for that encore career, AARP’s Take Charge of Your Financial Future Continuing Series offers advice on navigating tricky waters via three different interactive 90-minute programs. The sessions are free, you can attend one or all, and you don’t have to be an AARP member. Even better, they are educational events without a sales pitch.

Here’s what’s on tap this month:

November 1: Social Security Claiming Strategies 6 to 7:30 p.m.
Deciding when to claim Social Security could have a big impact on your monthly benefit. Find out what you need to know to maximize your benefit in retirement. A certified financial planner will give this presentation. Register here.

November 8:  Protecting and Growing Your Investments 6 to 7:30 p.m.
Understand the basics of protecting and growing your investments from a certified financial planner using a combination of bonds, stocks and mutual funds. Explore additional income streams in retirement to bolster your monthly income. Register here.

November 15:  Top Frauds and Scams 6:30 to 8 p.m.
New frauds and scams seem to crop up weekly. Identity theft, investment fraud and other scams rob millions of Americans of their hard-earned money. (Every two seconds, a con artist steals someone’s identity.) Understand the fraud that’s out there, the behaviors that put you at risk, and learn the prevention strategies that keep you from becoming a victim. A trained AARP volunteer fraud fighter will give this presentation. Register here.

All events will be held at NH McLane Audubon Center at 84 Silk Farm Rd. in Concord. Light snacks and beverages will be served but preregistration is required for each event as space is limited.