Retirement marks the start of a new life chapter and the end of another. The shift from full-time work to full retirement can feel abrupt, even unsettling, despite fantasizing about post-work life. This is probably because the one thing that you have done consistently for decades now suddenly disappears. That is why many are now looking towards phased retirements. 

The idea is simple; you don’t quit working completely. This can have the obvious financial benefit of still providing earned income, but it can also help ease the transition out of full-time work and give you the chance to slowly find new ways to fill up this extra time in your day.

Phased Retirement: A Gradual Approach

Phased retirement, or partial retirement, offers a smoother transition by reducing work hours gradually. Options include part-time work, seasonal jobs, freelancing, consulting, or even starting a business. The idea is to reduce your working hours gradually as opposed to stopping “cold turkey”. 

Benefits of Phased Retirement

Phased retirements can be considered a trial run for full retirement. It can help retirees adjust socially and emotionally by maintaining some workplace community and structure. Financial security is another huge advantage. Continued earnings provide additional income, reducing reliance on retirement savings and allowing more comfortable spending. Phased retirement can also help preserve health and Social Security benefits by maintaining employer health insurance until eligible for Medicare and delaying Social Security withdrawals to maximize benefits.


Phased retirements are not a blanket recommendation to every retiree. Potential loss of health benefits if reduced to part-time before Medicare eligibility can be an issue depending on your employer’s health insurance eligibility policy. There could also be a possible reduction in pension and life insurance benefits based on lower late-career earnings.

Is Phased Retirement Right for You?

Consider phased retirement if you:

  • Enjoy your work and want to continue part-time.
  • Aim to train a successor.
  • Worry about financial market stability.
  • Wish to try freelancing or consulting.
  • Have health issues making full-time work difficult.
  • Seek additional income to delay Social Security withdrawals.
  • Prefer a gradual transition into full retirement.

Talk to a financial advisor to see how a phased retirement can affect your financial plan. 

Any opinions are those of Munn Gray & Associates and not necessarily those of Raymond James. The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.