Is Semi-Retirement the Next Trend?

The lines between work and not-work are blurring.

Half a century ago, when we began our working lives, we thought of retirement (if we thought of it at all) as that point when we stopped working. Period. It was pretty straightforward: Working, not working. On, off. Regular paycheck, Social Security check.

My views on retirement had not changed until recently. Yes, in rare instances, a person might come out of retirement for a special reason, but generally, once retired there was no going back.

Today those sharp lines are blurring. There is even a term, “semi-retirement,” that suggests a state that straddles the middle.

One Word, Two Meanings

A note of caution about using that term: From my reading, I find that people use it to mean two different things. Some writers use the word to mean a gradual stepping down from full-time work. In place of that on/off divider, you slowly taper your workload from full-time to part-time to full retirement, or perhaps retirement with a part-time job or a side project. At the risk of sounding slightly Nixonian, I call this Phased Withdrawal.

But other writers define semi-retirement to mean taking breaks from full-time work at intervals throughout your career – stopping out for a year or two, then returning to work. Something like a sabbatical, this version of semi-retirement provides an opportunity to refresh your energy, make a career shift, learn new skills, or just catch up with family and community life for a spell. For clarity, I call this concept Opus Interruptus.

Both concepts are interesting. Phased Withdrawal is a kinder and gentler way to cross the threshold from work to not-work. For one thing, it is a smoother bridge between regular paycheck and no paycheck. Statistically speaking, most Boomers reach retirement age with a small and inadequate cushion saved up. Semi-retirement keeps income flowing and gives one last opportunity to squirrel away funds for the years of income drought. And for those who approach retirement without a clear idea about what they intend to do for the rest of their lives, having fewer working hours opens up hours to explore possibilities. A gradual retirement also gives workers more time to adjust to having an identity that is not built on what they do for a living.

Employers Are Lagging

Phased Withdrawal is quite popular with working adults. In a Harris Poll conducted for a staffing firm, eight in ten working Baby Boomers say they would welcome a flexible schedule, two-thirds would consider moving into a consulting role at their current firm, and 59% would be open to reduced hours and benefits. But here’s the kicker: only 21% say their employers offer any gradual retirement options.

What happens instead is predictable: retired Boomers join the gig economy. Across the nation, 16% of Uber drivers are 55 or older; 25% of Lyft drivers are older than 50. Or they get creative like my late Uncle Mike, who worked off the books in his nephew’s business and was paid strictly in cash. It made his tax returns simpler. (For more creative and more legal ideas, check out Second-Act Careers: 50+ Ways to Profit from your Passions During Semi-Retirement.)

As for Opus Interruptus, few structures exist now to accommodate this. The only socially acceptable work breaks that come to mind are maternity leave and graduate school. However, there are reasons to expect that periods of stopping out will become more common.

“We have a new reality we’ve created – a longer life expectancy – and it’s exciting, but we’re not supporting it yet in ways that will benefit everyone,” says Linda Fried, Dean of the Mailman School of Public Health at Columbia University.  She calls the 30 years added to life expectancy in the past century the “third demographic dividend” – the first being the shift from agrarian to industrial society and the second the baby boom. One result of the dividend is a mismatch between the age of retirement and life expectancy.

Demographic Dividend

The New Map of Life Project at Stanford University’s Center for Longevity has proposed a solution for the mismatch: stretch work more evenly over the adult lifespan. In a 100-year life, the project envisions work taking up 60 years or more, but in more flexible arrangements that might include paid or unpaid intervals for lifelong learning, caregiving, heath needs, and other transitions (Opus Interruptus, in other words). Spreading work over more years could take the pressure off people in their 30s, 40s, and 50s who try to balance work with conscientious parenting and, often, care for their own aging parents.

It seems increasingly likely that semi-retirement, in both senses of the word, will be a more familiar pattern in the future as our society accommodates to the new reality of longer lives.