Is Semi-Retirement, Unretirement, or Full Retirement Right for You?

Retirement is a monumental milestone that we work our entire lives to achieve. But going from working full-time to not at all overnight is challenging for many. Some people are unable to establish the savings necessary to give up employment income entirely. Others find themselves bored, not knowing what to do with the sudden increase in free time. For these reasons, many older Americans choose to unretire or semi-retire. 

What is unretirement?

Unretirement occurs when someone who has retired chooses to return to the workforce. Unretirement isn’t new, and it’s not too uncommon. One in six retirees consider returning to work, and the unretirement rate tends to hover around 3%. The top two reasons American retirees consider a return to work are because they need more money or are bored. Others cite loneliness and economic factors like inflation and stock market volatility as reasons they consider a return. 

While many who consider unretirement would want to work full-time, 35% say they’d like to work part-time. Furthermore, 53% say they’d like to work remotely, and another 27% are interested in a hybrid model. For those who would prefer the freedom offered by part-time and remote work, semi-retirement is another option.

What is semi-retirement?

Semi-retirement occurs when someone chooses to stop working full-time but remain in the workforce, either by working fewer hours in the same line of work or taking a new part-time job that interests them. Both options make it easier for people to transition into retirement when they’re not sure about their financial stability or how they’ll spend their time. 

Benefits of semi-retirement, compared to full retirement

Semi-retirement offers a smoother transition from full-time work to full retirement. It allows retirees to keep working while enjoying some of the freedom of retirement. Besides freedom and a smoother transition, additional income, social engagement, and structure are important benefits for semi-retired folks. 

Extra cash

Semi-retirement allows you to continue generating income. This extra income can supplement retirement savings, support your desired lifestyle, or help you achieve specific financial goals without the pressures of full-time employment.

Social interaction

There’s no doubt that, for many, work offers social connection. Working part-time allows you to develop or maintain social connections with those outside of your immediate friends and family. Social connection helps us maintain our cognitive and physical health as we age. 

Structure and stimulation

If you don’t have a lot of hobbies and your friends and family are still working, you may be worried about how to spend your time in retirement. Semi-retirement allows you to maintain some structure and avoid boredom, which can result in a sedentary lifestyle and a lack of purpose. 

Is semi-retirement or a hobby right for you?

Semi-retirement has many benefits, but if you do not need extra income, you may find more satisfaction from one or a few hobbies. In some cases your retirement job may also overlap with your hobbies. For example, when it's time for me to retire, I  imagine myself enjoying gardening while also working part-time at a garden center to share my hobby with others. 

There's no "right" way to retire; even semi-retirement comes in many forms. When determining how you want to retire, consider your financial situation and what you want your retirement to look like. If you're uncertain that you'll have enough money to retire fully, then semi-retirement can help you maintain a source of income while still enjoying the freedom of retiring. If money isn't a concern, but you don't have a lot of hobbies or would like to maintain some structure and social interaction, then semi-retirement may still be a good way to go.