For many Americans, the question of when to retire often overshadows the question of how to do so. Not everyone looks forward to the unstructured free time that retirement creates — or has the necessary funds to leave work altogether. Fortunately, there are some options to consider, each of which represent a more gradual approach to entering your retirement era.

Retirement today doesn’t necessarily have to be an abrupt end to your working life. Indeed, for many people, the idea of going from full-time work to full-time retirement can feel daunting. There may be understandable concerns about losing professional and community ties. And some older adults may be reluctant to leave behind the intellectual stimulation that work provides.

Taking a more gradual approach to entering retirement may be pursued either formally or informally. Increasingly, many companies and governmental agencies offer a formal "phased retirement" option, one through which full-time employees can work part-time for their existing employers while also starting to draw retirement benefits.

Alas, that particular option isn’t available for everyone, so let’s take a look at some other strategies to consider.

A tiny note of caution

Before you dive too deeply into the topic of transitioning into retirement, you may want to think carefully about how changes to your employment status could impact your income and tax responsibilities as well as your eligibility for Social Security Retirement benefits.¹

In fact, it may be best to puzzle through which of the following transitional strategies interest you and then talk with your family, your company’s HR rep, a financial advisor and possibly a tax accountant to understand exactly how each one may impact you financially.

»Tip: Think through, too, retirement costs, many of which may be “hidden.” This includes rising health care costs, inflation and unexpected emergencies.

Stay connected professionally

Do you like your current career, have a good professional reputation, but feel ready to scale back your hours? You may find it easier to continue working² at a more pleasant pace while still earning money.

• Switch to part-time work. If your employer is open to you reducing your hours or job sharing, this can be an effective way to continue in your field, keep earning income for retirement, and possibly make it easier for the company to train someone to eventually step into your role full-time.

»Tip: Do you own your own company? A shift to fewer hours might be integrated into your business succession plan, or the formal strategy through which you prepare others (e.g., leaders or family members) to take over for you after you step back permanently.

• Consider a sabbatical. Many companies offer a sabbatical option to senior staff members as a way to help them avoid burnout, which can increase with frequency the longer that one is with a company. If you’re not quite ready to retire and your employer offers this opportunity, an extended break of a few months or even a year can help you return to your full-time job refreshed and ready to keep working toward the finish line. The time away from work can also let you see what post-retirement daily life might be like — and how you might want to prepare for it.

• Begin consulting. If you’re ready to leave a regular work schedule behind, your employer may be willing to keep you on for contractual consulting work. You may be able to offer your services to other clients, too. Just make sure you comply with any existing non-compete clauses in your current work agreement. And don’t forget to factor in related business costs, such as insurance, technology, and office supplies.

• Become an educator. Your expertise can be valuable to younger workers and career changers. If you have a great deal of experience and a strong professional reputation, you may be able to find teaching opportunities at colleges and trade schools in your area.

Reinvent yourself

Older Americans are redefining what retirement looks like, and many do so by switching careers. Might you be ready to try something new in your late 50s, early 60s or beyond? Here are a few options to consider.

• Retrain for a new career. Do you have a dream career you haven’t been able to pursue yet? Check out your local community college or university for certification programs and executive education courses. These options can be a comparatively quick and cost-effective way to jumpstart a post-retirement career transition.

• Pick up a part-time job in a new industry. Not interested in going back to school but want to work in a new field? Consider the classic approach of starting on the ground floor! Taking a part-time job in a field you’ve always wanted to try can help you build experience and decide whether it’s a good fit for you.

• Adopt a seasonal work schedule. Maybe you don’t mind working during the holiday season but want your summers free for travel. A seasonal job as a holiday retail cashier or package delivery personnel could benefit you to stay busy and put aside more money for warm weather adventures. Alternatively, if you like to focus on family during the winter holidays, consider working as a tour guide or tourist attraction employee during the summer.

• Start your own business. If you’ve got the resources, stamina and interest, you could finally start that little shop on the corner to sell books or open a place to sell seashells near your coastal beach community. Again, however, don't forget to budget for upfront and recurring costs.

• Monetize your hobbies. If you have a skill you’d love to share, like woodworking, cooking, robotics or sewing, you may be able to teach others in person or online. You might also be able to sell your creations. For example, Texas Cottage Food Production rules allow bakers and other home chefs to sell their products.³

• Hit the road. If you can work remotely and want to see more of the country, you might enjoy the “van life”. Buying or renting a converted van or RV — and investing in the connectivity tools to work from remote areas — can give you the opportunity to take road trips without fully disconnecting from work. You might want to pair this nomad lifestyle with part-time or consulting work with your current employer.

Connect with your community

Ready to ditch paid work altogether but eager to stay connected to the outside world? There are other ways to share your skills and connect with your community as you transition into the retirement lifestyle.

• Travel through house-sitting. If you want to spend less on accommodations when you travel, you might be a good candidate for house-sitting. These arrangements are typically a swap: You stay in someone else’s home and take care of it while the owners are away, with no money changing hands. The key to successful house-sitting is to find a platform online with a good reputation, create an appealing sitter profile, and monitor alerts for target destinations.

• Volunteer. From helping families with NICU babies to teaching children how to read, there are countless ways for you to get involved. Your city or county website may have a list of volunteer opportunities, as may your alma mater or state agencies. And don’t forget to look for organizations that connect experienced professional mentors with emerging working professionals.

• Embrace multigenerational or communal living. If you have a close relationship with your adult children, grandchildren or other family members, you might want to explore sharing a home with them and dividing up childcare and household responsibilities among a larger crew. Some families find that this approach helps them spend more time together, save money and reduce stress.

Alternatively, many older adults are seeking out ways to live communally with other mature people outside of their family. This approach to residential living can foster a sense of togetherness and support, and it can be as simple as moving into an apartment complex near friends or building a compound to share.

The takeaway

To put it simply, there’s no “right” or “wrong” way to enter retirement. And there’s nothing wrong with transitioning gradually. By exploring various strategies, you can identify the best options and alternatives for you personally.

Of course, in a perfect world, you’ll have begun working closely with a financial advisor long before you reach the retirement transition.

Yet, if you’re nearing retirement age, it can’t hurt to reach out to a professional for further insights. This is especially true if you’re looking for a second opinion on your existing financial plan, as there may be ways to fine tune it.

Fortunately, from simple retirement planning solutions to sophisticated investment strategies, RBFCU Investments Group is ready to help you make more informed choices by providing financial planning services tailored to each stage of your life.