Considering working part-time?
There are many social and even financial benefits if you choose to go part-time. It may be worth considering as a transition towards retirement or as an opportunity to have the time to chase dreams such as study, volunteering or travel. But there also a number of important considerations.
- How to access your super while you are still working
- How much do you need to live comfortably in retirement?
- Super: get greater control with a self-managed super fund
Gradual transitioning into retirement with part-time work is becoming increasingly common. Australia has an estimated three million full-time workers aged over 45 years with 30% of this group saying they intend to shift to part-time work before eventually retiring and a further 5% intended to take up part-time work but not necessarily retire (ABS, 2008-09).
Considering the shift?
It is important to consider that many of us who have enjoyed a rich working life may find the transition into retirement more challenging than expected. For many reasons, you may not respond to retirement in the ways you thought. Whether it is financial pressure from a seemingly never-ending stream of bills or the lack of daily social interaction, there is plenty to motivate us to return to part-time work if retirement isn’t the dream lifestyle we imagined.
Adapting to a new financial situation takes careful consideration. Whether it's a super pension plan or an SMSF rent-related pension payment plan, the transition from full-time work directly into retirement can be alarming for those accustomed to a full-time wage. An interim period of part-time work provides more financial support, while also allowing more freedom and less stress. Socially, there are also many added benefits to working part-time. Transitioning into part-time work is also just a way of staying in touch.
5 ways to make a good transition
- Here are a few simple things to consider to ensure the change in your working life lives up to your expectations. Whatever your motivations, here are a few tips to help you prepare for going part-time.
- Consult your financial planner and seek professional advice about your retirement plan. Know the precise details of your financial plan and be honest about whether those budgetary restrictions are too heavy. If you're not comfortable, part-time work is a good way to add to the next egg.
- Stick to your carefully created budget. Even if you've found part-time work, it won't compare to a full-time wage. Be prepared to make cutbacks and some necessary changes to your social life (eating out less, spending less on entertainment etc.)
- Consider starting your own small business. You may not have to work part-time for someone else; if you have a skill or passion that has the potential to earn you money, consider becoming your own boss.
- Becoming a volunteer is a fulfilling option. If you have social motivations for avoiding retirement, or are finding retirement boring (the ABS indicates that 34% of retirement-age Australians return to the workforce for this reason), then volunteering might give you the extra social contact you're craving.
- If you're scaling down your working hours, after giving yourself a break for a period of time then keep a structure to your week. For those in the enviable situation of being able to work fewer hours at a stable job, seek to replace your working hours with leisure activities or interest-based pursuits such as studying.
What do you think about going part-time? Join our conversation below...