Can You Afford to Semi Retire?

Retirement planning tools are a great way to get a quick picture of where you stand when it comes to your finances and the chances of a great retirement. 

Many banks offer these, and of course the bank will steer you towards their services for your retirement and scare you with the amount of money they feel you will need to save up to enjoy your retirement years.  You can find these retirement calculators free online, or you can also get a good book.

But what if you want to semi-retire right now?  What if you don’t want to fully quit the working world, but want to give up these stressful long weeks?  What if you are in your 40s or 50s and are not ready to draw on your social security just yet?  What if you are feeling antsy and are tired of what you are doing right now and the thought of having to do this for another 15 years scares you to death? Why not consider semi-retirement?

Unless you are one of those people who have been blessed with an easy life and a healthy bank account, chances are you are going to have to do some fine tuning to your finances and get out the sharp pencil.

Start by searching for retirement planning tools online.  Punch in your present income and any savings and see where you stand.  These retirement calculators are a great way to see what you need to do to retire properly and at what age, but for semi-retirement, this may take a bit more tweaking, as there doesn’t seem to be an app for that!  I have yet to find retirement planning tools for the semi-retired other than books.

If like many people in this economy, you have simply been “forced” into a state of semi-retirement due to hours being cut back, then you need to get on top of your finances the best way you can. 

Start by gathering all your bills and going through everything, this includes subscriptions, extra channels on that cable or satellite bill, meals out… everything.

Start getting rid of these things.  Save the ones that really mean the most to you, such as a retirement planning toolsparticular magazine, although check your local library, many will lend out magazines. You may think you know all your bills, but you will be amazed at how many “nickels and dimes” are going out the door each month.

Now take a look at your home.  Are you living in a particularly expensive area due to work?  Is it possible to sell it and move to a smaller house in a cheaper area if your job is not an issue anymore? Work Less, Live More: The Way to Semi-Retirement

A friend of mine was having health issues due to stress of her job.  They started cutting back her hours and finally she was fed up.  She quit, sold her downtown condo and moved north and took on a part time job, and says she is happier, and her money goes just as far.  Now this may sound easy, but it is not.  These types of decisions should not be taken lightly, but if your job has cut you back on hours, then you either need to get out or do something else to bring in extra cash.  Some people use retirement planning tools to find a way to go back to school for retraining.

As a partner in a family business, we were faced with this choice last year.  We fix large bodied aircraft for a business, and as more and more airlines are having financial difficulty, it gets more difficult to get them to pay their invoices.  Many of these airlines are now getting major work done at airports further away to save money, which now means travel.

We have our home situated in such a spot that it was convenient to the major airport, but now that work is not being done there, why stay?

Of course the housing market will dictate your selling price, so another option at getting creative is to rent part of your home.  Whether it be a room or the basement, if you are still living in the house, many townships will allow boarders or even a basement apartment, as long as you live there too.

We decided we still liked the area and rented the second floor of our house out.  The rent pays for the bills on this house, allowing us the freedom to pick and choose which contracts to take on for the business.  This is not for everyone.  We share the kitchen facilities, but it works well for us.  They are a working couple, and we don’t see them much once they are home.

Using retirement planning tools, we were able to really go over expenses and get rid of quite a few.  We also decided not to have all our eggs in one basket.  We took some investment money we had making very little interest and purchased an investment semi-detached house.  Fixed it up and rent it out to a nice family that we thoroughly checked out.

We now draw rental income from 2 sources, our own home and this rental property nearby.  We also decided to diversify a bit.  We also fix up older classic cars in our garage and then sell them.  This is a hobby that pays.   Plus we get income from passive online ventures that pay each month such as article writing.  I also do some bookkeeping part time for a business.

We now realize that this was a good thing that happened to us.  We were stunned at first, but the hours my hubby used to spend at the airport were long, he basically worked, ate and slept.  Now that we are in our 50s, and a couple of health scares, we realized that we needed to change our ways.  So, he picks and chooses contracts for the business, maybe 3 weeks here and there with plenty of time off in between.

We consider ourselves in semi-retirement now.  We enjoy our days together, we both are at home, and our kids are grown and on their own.  We got rid of excesses and enjoy more meals at home instead of grabbing them while working.  We are staying in this house for a while, and we have adjusted to having tenants in the upstairs that was just collecting dust anyways since the kids moved out.  Now I only have to clean the main floor and our basement rec room.

So, get out those retirement planning tools, and really look at your circumstances.  Is there a way you can rent part of your house? Can you room and board a student? Could you possibly invest in a rental home, or consider moving to a duplex and rent one half?

Once you get rid of the hours at work and the rushing, you will find you don’t need the same daily cash.  By being semi-retired we can go on trips when we want and sometimes will incorporate them with a contract to repair aircraft in another town. 

I am not saying this will work for everyone, especially with the real estate market the way it is, but if you just stop for a minute and really look at your life, you may just figure out your own retirement planning tools and enjoy life by going semi-retired.   We really like this way of life and may just stay this way as long as we can.  We can now breathe and enjoy life!  Also see retirement gift baskets for more great ideas.