Personal Finance

The Retirement half step.

New York Life | September 30, 2021

 A mature person walking on the street smiling

Phasing into retirement by continuing to work at a reduced level is becoming increasingly popular among a new generation of near-retirees.

Work during this phased-in transition may take a number of forms, from fewer hours with a current employer, to a new role that an individual feels passionate about.

This interim step between full-time employment and full-time retirement can help individuals meet some of the biggest challenges they’ll face in retirement, including:

Financial Security

Maintaining financial security throughout a decades-long retirement is a monumental challenge, made more difficult by COVID-19 pandemic-related setbacks.

Working part-time as an interim step to full retirement, however, improves a retiree’s financial security by:

Allowing individuals to defer Social Security until they reach full retirement age, or even as late as age 70, which provides higher lifetime benefit payments and allows retirement savings to last longer.

Nearly 70 percent of Americans begin taking Social Security before they attain the age at which they would receive full income benefits, resulting in an average household loss of $95,000 over the course of retirement.As a consequence of lower Social Security benefits, retirement savings are in greater peril of running short.

  • Delaying the drawdown of retirement assets, providing additional time for savings to grow and compound.
  • Potentially preserving access to health insurance coverage until an individual becomes eligible for Medicare at age 65.

Emotional and Mental Health

Researchers at the Harvard School of Public Health found that retirees were 40 percent more likely to have a heart attack than individuals of the same age who were still working, while another study out of the U.K. showed that nearly twice the number of retirees suffered from chronic conditions such as diabetes, stroke or cancer relative to those still working.2

It’s not just physical illnesses that can affect retirees, but depression, stress, and cognitive decline can arise from the loss of identity, purpose, status, structure, and friendships that can characterize retirement.

Working part-time combats these potential adverse health outcomes by:

  • Providing the social connections and intellectual stimulation that promote better physical, mental, and emotional health. 
  •  Creating a transition period to more leisurely explore the personal passions that can be the foundation for a more fulfilling retirement.

Reducing marital stress in retirement, whether that stress is related to finances, increased time together, or a difference in a desired lifestyle. (Research shows that 38 percent of couples disagree on the lifestyle they want to lead in retirement.3)

  • Offering the flexibility to meet disparate goals, like travel and work. Working part-time in an internet-connected world means that individuals are no longer anchored to a single location, allowing them to work from anywhere.

The best approach to retirement is as individual as you are, which is why it may be helpful to have a New York Life financial professional at your side during this critical decision-making time.

1 Jason J. Fichtner, Shai Akabas, Gary Koenig, and Nicko Gladstone, “How to Help Americans Claim Social Security at the Right Age,” August 2020.

2Doreen Rosenthal and Susan Moore, “The Psychology of Retirement,” October 30, 2018.
3Margery D. Rosen, “Advice for Couples Who Stagger Retirement,” AARP The Magazine, April/May 2016.


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Media contact

Sara Sefcovic
New York Life Insurance Company
(212) 576-4499