Create Your Own Retirement

Editor’s note: This article is part of Lessons from Leaders, a Next Avenue initiative made possible by the Richard M. Schulze Family Foundation and EIX, the Entrepreneur Innovation Exchange.

Wading gently into retirement — reducing hours, mentoring and generally making sure institutional knowledge is shared before you go — can benefit both workers and employers. It sounds like an easy sell. Everyone wins.

Lots of older workers would like to enter retirement incrementally, but few U.S. employers have policies that explicitly allow it. The federal government does, and many universities do as well.

Oddly, the federal government is responsible for the notion that 65 is the age to retire; that was selected as the age when American workers became eligible to start receiving Social Security retirement benefits. Many companies incentivized it with pensions. For a lot of us, the pensions have disappeared, but the idea that 65 is the time to retire has not.

Not only is there little agreement on when retirement should start, there is little agreement on what retirement is. More than two-thirds of U.S. adults surveyed last fall by OnePoll for Human Interest, a market research company, said they think retirement is a gradual transition away from full-time work; 11% think you can work up to 11 hours a week and still be retired.

Eric Phillips, senior director of partnerships and strategic insights at Human Interest, calls this slow withdrawal from the workforce "pretirement." Maybe that's what I was after when I asked my employer about transitioning to part time.

When I began to contemplate working fewer hours, I was working full time as a writer and occasional editor. I wasn't bored with my job or career, and I didn't want to retire — I just wanted to work less.

Now, I work when I want to — typically between 12 and 25 hours a week — and politely decline assignments I know I won't enjoy. In the last few weeks of full-time work, I made notes of the tasks I looked forward to as well as the ones I would happily give up. It's useful in evaluating potential assignments.

Being kind of retired — but not really — is a not-always-predictable workflow that broadens the subjects I write and think about. I rarely skip fitness class now, I am not hopelessly busy, and I have the bandwidth to be a better friend. I took up knitting. And I didn't panic (much) when markets plummeted right after I left my job, because I was confident that I could earn enough to avoid tapping my shrinking 401(k).

Admittedly, this comes from a place of privilege. I am educated, own the equipment I need and could afford to fail. I had my financial planner's blessing — I had reached full retirement age and could rely on Social Security income as a backstop. Those are luxuries.

Another perk of DIY phased-in retirement: I'm not locked into a program where I have to agree to fully retire in a certain number of years or work a certain number of hours. The downside is I no longer have access to benefits or a 401(k).

If you're thinking about designing your own "pretirement," here are several things you might want to consider, according to Jordan Grumet of Evanston, Illinois, the author of "Taking Stock: A Hospice Doctor's Advice on Financial Independence, Building Wealth and Living a Regret-Free Life."

• How much income do you need to generate?

• If you do not qualify for Medicare, how will you get health insurance (and at what cost)?

• What activities energize you? Which ones do you find most fulfilling?

• How comfortable are you with uncertainty? (If a steady job and regular paycheck are important, a part-time job, or a recurring gig might suit you better than freelancing.)

• Do you want to continue to do what you've been doing, or do you want to try something completely different?

• What other roles might you have that need to be considered? Do you have caregiving or other responsibilities?

• How will you stay engaged? This could take the form of finding groups of people doing or learning similar work or getting out of the house and into a coffee shop to do some of your work.

Grumet, 49, advises first subtracting the elements of your job that produce the most stress. For him, that was seeing patients as a physician in private practice. While he now identifies himself as a podcaster and author, he continues his hospice work — the part of his work he found most fulfilling.

Once you strip away the parts of your job or your life you don't enjoy (or need to survive), you can add in things that give you joy or a sense of purpose and fulfillment.

As you do this, have a calendar handy and create a schedule, Grumet advises. When you're creating your own job, an anchor of some predictable meetings or tasks helps.

Paul Dillon, 77, now an adjunct instructor at Duke University in Durham, North Carolina, retired as a consultant for a Chicago accounting firm in 2006, just shy of his 61st birthday. He initially offered project management and business development services.

Dillon found his calling five years later, when a client asked him to research Chicago companies that were hiring veterans. He did far more research than they asked or expected.

He eventually created the concept of a business incubator for veterans. That led to developing a non-credit college course about veterans, and eventually, to a course for credit at Duke, where he moved to be nearer to grandchildren.

His advice? Be flexible. At a traditional retirement age, he found and pursued a passion. Now this Army Reserve veteran, who also served in Vietnam as a 1st Lieutenant, occasionally teaches a course he created, and he's sought out as a subject matter expert.

Is Dillon retired? He says he works 10 to 15 hours a week when teaching, otherwise about two per week.

The mentoring piece of a DIY retirement runway isn't as hard to find as you might think, though it won't match the sort of mentoring you'd be doing if you'd stayed on the job.

Mine has been largely helping other writers and editors figure out how to handle the financial part of being a freelancer, something I began to learn about when I moderated a panel on that topic.

Dillon believes opportunities to help can come from just keeping your eyes and ears open and being willing to explore new ideas and take small risks.

Not all rewards are financial, he adds. Dillon believes there's an obligation to keep doing good things, citing the admonition of St. Luke that to whom much is given, much will be expected, and tikkun olam, the Jewish concept of repairing the world.

"You've got a lot of talent out there," he says, ". . . Go use it for the benefit of others."

Bev O’Shea is a freelance writer specializing in personal finance topics. She is a
mother of two adult children and lives in Georgia with her husband, cockapoo
and calico. Read more of her work at bevoshea.com. Read More