Lisa Farnham, 53, of Dedham, Mass., doesn’t see retirement as a hard stop where one day she quits her job for good. The senior outreach consultant would like to transition into a predictable part-time schedule in about five years, when she and her husband expect to be done paying college tuition for their two children. 

“I would like to do 24 hours. I’d like to work Tuesday, Wednesday, and Thursday,” she says. With a lighter schedule she hopes to volunteer, tackle home maintenance and improvement projects, and maybe travel. 

“It would be lovely to be under 60 and do that for a few years,” she says. “I don’t want to go cold turkey. It’s a path toward retirement without totally stopping.”

A gradual transition

Farnham is one of many workers who would like to phase into retirement gradually, with fewer hours, less demands, and more satisfaction. Research from the Transamerica Center for Retirement Studies reports that 62% of Generation X workers and 68% of Baby Boomers would like to transition into retirement. 

Considering most people are in the workforce for 40 or more years of their life, I tell my clients it may become difficult physically, mentally, emotionally, and socially to just ‘quit’ decades-long engrained routines, habits, and behaviors,” says Daniel R. Hill, president of D.R. Hill Wealth Strategies in Richmond, Virginia. “A scaled-back work schedule is a smart way to remain active on all aspects in the next phase of their life.”

Here are a few things to think about before you shift away from your decades in the workforce.

Can you afford to retire?

Phased retirement can put you in a much better financial position compared to traditional retirement. “Early retirement years tend to come with high expenses but low retirement income,” says Patrick Ford, director of wealth management at Brown Wealth Management in San Diego. “Semi-retirement can help bring in additional income and bridge that gap. Even a modest income can greatly reduce the risk of outliving one’s nest egg.”

Of course, sticking with a full-time schedule can boost your income even more. And full-time work means you’re likely contributing to Social Security at your highest income level, notes Peter M. Ferriello, a senior wealth advisor and vice president at Mollot & Hardy in Salt Lake City. That’s important, because Social Security calculates payments based on the 35 years where you earned the most.

Are you overlooking these expenses?

Healthcare expenses can hit hard if you’re not 65 and eligible for Medicare. If you have employer-sponsored health insurance, will you lose coverage if you scale back your hours? If so, you’ll need to price out COBRA coverage or private healthcare insurance.

You may think you will be done supporting your children post-college, but many early retirees help their kids with car insurance, cell phone plans, healthcare coverage, and other expenses while their children are starting their careers.

And travel can be a big cost when you scale back your work hours. Many people want to explore the world with their new-found free time, while they are in good health. 

What will you do with your time?

Experts point out that many full-time retirees struggle with transitioning away from work life.

Brandon Renfro, a fee-only financial advisor and assistant professor of finance at East Texas Baptist University in Marshall, Texas, says, “Going from a full-time schedule to a completely open schedule very abruptly can give you a little bit of an emotional or psychological whiplash. Easing into it will give you more time to sort out the details on what exactly you will do with your newfound freedom.”

People in high-stress positions with long hours may overlook the structure, purpose, and challenge that comes from working.

Ford agrees. “Slowly winding down can help ease the transition from the daily grind to unlimited free time,” he says. “Many people fail to fully appreciate the benefits of their career.” People in high-stress positions with long hours may overlook the structure, purpose, and challenge that comes from working.

You may have an idea of how you’ll spend your time in retirement, whether that’s traveling, volunteering, or caring for grandchildren. Marianne Oehser of Huntsville, Alabama, a certified retirement coach and author of Your Happiness Portfolio®= for Retirement: It’s Not About the Money, says that by starting slowly, you can experiment to see what you really enjoy doing.

And with phased retirement, you can make new connections gradually. “That’s particularly helpful if your friends are still working,” Renfro says. “Retirees are often surprised by how lonely retirement can be when they suddenly disconnect.”

By working part-time, can you delay collecting Social Security?

Working into your 60s can help you postpone taking Social Security, which can give you a bigger payment when you do retire. 

Shawn Plummer, a retirement income expert and blogger at The Annuity Expert in Kennesaw, Georgia, recommends putting off collecting Social Security until age 70 so you’ll have that income for long-term care services like a nursing home, home health care, or assisted living. Odds are, it’s an expense you’ll face: The Department of Human Services anticipates that 70% of people age 65 today will need some sort of long-term care.