Semi-retirement appears to be the best way to transition from working to retiring full-time.
I’ve always encouraged readers to consider this option if they are in good physical and mental shape. So I was pleased to read the results of a new Canadian Imperial Bank of Commerce survey.
More than three-quarters (78 per cent) of Canadians surveyed said reducing work hours or other forms of semi-retirement enabled them to get the best of both worlds.
At the same time, Advisor’s Edge quoted a warning from Jamie Golombek, managing director of CIBC Financial Planning and Advice:
“Too many Canadians approach retirement without a plan, which can lead to unnecessary stress, worries about money and even course corrections,” he said.
“It’s important to visualize your retirement and be clear about how you’ll spend your time.”
My advice: Don’t retire until you have arranged something to do that will engage you at least as positively as your present job.
The survey showed 27 per cent of retired Canadians regretted their decision to retire, and 23 per cent tried to re-enter the labour market. More than half of those said they wanted the mental stimulation, 50 per cent also cited financial concerns.
However, planning to return to work after retirement doesn’t always work out. The CIBC survey showed 30 per cent gave up trying to find a job and 38 per cent ended up with a lower pay grade or position.
And there could be unexpected financial results like limiting certain tax credits, or putting you into a higher tax bracket – resulting in less take-home pay than you had expected.
“Power of three” steps to take:
1. Don’t leave retirement planning until retirement.
2. Don’t be retiring about researching your options.
3. Don’t be retiring about asking for advice from a retirement planner who focuses on your needs rather than their commission.
