The rise of semi-retirement

By Sheryl Smolkin

Call it semi-retirement, phased retirement, an encore career or a second act career. It all amounts to the same thing. And a new global survey from HSBC shows it is a growing international trend.

The reality of retirement is evolving and semi-retirement – working fewer hours and/or changing jobs – is becoming more widespread. Traditionally, retirement meant a sudden switch from a busy full-time work routine to a more relaxed lifestyle. Many of today’s working age people are seeking a more gradual transition to life after work.

Easing into full retirement
While only 17% of Canadian retirees semi-retired before fully retiring, almost half (45%) of working age people are planning to ease into retirement before they stop work completely. A similar proportion (40%) expect to switch straight from their current job and working hours to full retirement and 15% expect that they will never be able to fully retire.

There are differences between men and women, with more men (42%) planning to move immediately from their current job and working hours work to full retirement than women (38%). Those closer to retirement (aged 45+) are more likely to believe they will never retire (20%) compared to those aged 25-44 (12%).

The life of a semi-retiree
Almost three in five (57%) of those working age people planning to semi-retire want to stay in the same job but work fewer hours, while just over a third (35%) are planning a change in career as well as reduced hours. A significantly smaller proportion (8%), plan to semi-retire by changing career but working the same hours.

Men are more likely than women to favour staying in the same job but reducing their hours. More than three in five (62%) men plan to do this compared to just over half (53%) of women. Conversely, 37% of women plan to change jobs and work fewer hours, compared to 32% of men.

Choice or necessity?
The graph below illustrates the reasons why Canadian retirees who initially semi-retired made the decision to do so. It is interesting to note that only 18% said they semi-retired for health reasons and 12% said they could not afford to fully retire.

Why did you move from working full-time into semi-retirement? (Base: All who semi-retired)
18%: To reduce stress
38%: Didn`t want to retire full time immediately
37%: Keep active/ keep my brain alert
35%: Like working
26%: Wanted an easy transition into retirement
28%: I no longer needed to work full time
20%: It was something I planned and was able to do
18%: Health reasons/physical demands
17%: To maintain a comfortable lifestyle
12%: Cannot afford to retire

You can’t take it with you 
When asked whether it is better to spend all of your money or save as much as possible to pass on to the next generation, the majority (66%) of working age Canadians take a balanced view, believing that it is better to spend some money and save some to pass on.

However not everyone agrees. More than one in five (21%) working age people believe that it is better to spend all your money and let the next generation create their own wealth. Comparatively few (13%) agree that it is better to save as much money as possible to pass on to the next generation.

Attitudes towards spending and saving vary from country to country. Over a quarter of pre-retirees in Hong Kong (28%), Canada (27%), the UK (26%) and Australia (26%) say that it is better to spend all your money and let the next generation create its own wealth.

In contrast, fewer working age people in Mexico (12%), the UAE (15%) and Indonesia (16%) agree that it’s better to spend all your money.

Also read: Will you be working at 66?

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