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What is Semi-Retirement & How Should You Plan for It?

By Finserv MARKETS - Mar 12,2019
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6 ways to ensure regular income after retirement

For most people, retirement means relief from a lifetime of work and a chance for some much-needed relaxation. For many others, it means boredom. As a result, more and more people are choosing “semi-retirement” as an option for their later years. Furthermore, with an increasing number of individuals earning salaries that can lead to significant savings, combined with the excruciating pressures of professional commitments, many career professionals are exploring the option of partial retirement.

In short, semi-retirement can be described as a period of life in which although you are retired, you are still working because you want to. After entering semi-retirement, you can cut back on the amount of work you do rather than stopping altogether, leaving you with more room for leisure while providing valuable financial assistance.

However, for most Indians, a partial or early retirement is very difficult. In a 2017 global retirement index of 43 countries which took into account factors like saving avenues and healthcare, India ranked the lowest. So for any of you thinking about semi-retirement, where should you start and what should it look like? While it’s hard to say, as everyone’s financial requirements are different, but presumably, the following characteristics can be agreed upon by all:

1.Start saving money

You should get into the habit of setting aside a portion of your income on a regular basis to help prepare for the future. That way, you will have a reserve to draw on once the downtime increases. You can consider investing in Unit Linked Insurance Plans for exponential investment growth to smoothen the transition into semi-retirement. Also, you should focus on paying off any outstanding debt as soon as possible as it can hinder the ability to build up a financial safety net.

2.Establish a budget

You also need to come up with a realistic figure that is enough to survive on while working less. Estimates should be high, just to be on the safe side.

3.Put investing on autopilot

You should not put all of your eggs into one basket and allocate investments broadly. With ULIPs, you can practice smart diversification through investing in a variety of asset classes such as equity and debt. Unit linked insurance plans also give you the facility to rebalance your portfolio as per a target asset allocation — the way the money is divided among investments — and you should strive to maintain that.

Also, most educated investors understand that fees can wreak havoc on long-term investment performance. With Finserv MARKETS, you do not have to pay any premium allocation charges for ULIPs.

4.Think through the unexpected

Anything can go wrong at any point in your life, but when you are beyond your 60s, health becomes a major cause for concern. That’s why it’s important that you get health insurance, so that you do not have to rely too much on your semi-retirement income for such medical emergencies.

A good life insurance policy is also indispensable, especially as you get older and health issues become more common. With life insurance coverage provided with unit linked insurance plans, you can protect your family from financial disruption in case of your demise.

5.Find ways to continue working

Even before taking partial retirement, you should be sure of how will you continue working. You can either start your own business or find a part-time job. Even in your current job, you can switch to a less demanding position or work for shorter intervals of time.

6.Make the most of it

The whole point of retirement is to finally get around to doing the things you could not do while you were too busy working. So, you should not make the mistake of becoming sedentary as it invites health problems. You should remain active and keep looking for ways to stimulate your mind. Study another language, go paragliding or teach yourself to play the guitar.

Semi-retirement looks different for each individual – for you, it might be a chance to travel or to pursue your passion for art. Or maybe it’s a choice to spend more time with your children.

However, once you start to prepare for partial retirement, you will also have to prepare for financial independence as it is no replacement for a proper retirement plan. Investing in a pension plan and health insurance with Finserv MARKETS will help to ensure that you work less and live more.

To know more on ULIP investments in depth, you can check out these blogs:

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