Retirement Planning, Elder Law, and Senior Finance Overcome Your Fear of Retirement 10/4/2023 | By Sandra Block Fear of retirement is a real phenomenon for millions of older Americans. If you’re behind on saving, the fear is probably warranted. But even if you’ve accumulated a substantial nest egg, the thought of going without a regular paycheck may be scary. “Although someone may be financially well prepared to retire, emotionally it can be very difficult,” says Edward Snyder, a certified financial planner in Carmel, Indiana. A recent report from Northwestern Mutual found that Americans, on average, expect to work until age 65, up from 62.6 in 2021. Many are working much longer than that, even if they can afford to retire. The downside to delaying the move simply due to fear of retirement is that you may miss out on some of the best years of this stage of life. Easing your fear of retirement One of the most effective ways to make the transition to retirement is to do it gradually. Thanks to a tight labor market, along with the need to retain experienced workers, it’s easier than ever to shift to phased retirement, which typically involves working fewer hours, sometimes in a mentorship role. Elizabeth Emshwiller, 69, retired in 2021 after 37 years as a registered nurse but found that she missed her patients and the camaraderie she experienced while working in a hospital. Yet she didn’t want to work the long hours typically required of hospital staff nurses. While looking at jobs on Indeed.com in January 2022, Emshwiller learned about the Emeritus Nurse Program at the Novant Health New Hanover Regional Medical Center, in Wilmington, North Carolina, which employs retired nurses to coach and mentor new nurses. She applied for the program and is now one of 12 emeritus nurses at the center. Nearly one-fourth of employers offered phased retirement in 2021, up from 16% in 2016, according to the Society for Human Resource Management. Although the arrangement is usually done on an ad hoc basis, with employers more inclined to offer it to workers who have specific skills or experience they value. If you’re interested in phased retirement, start the conversation with your employer well before you plan to make the shift. Point out how the arrangement will benefit the company. Make sure you and your employer have a clear understanding of how many hours you’ll work, says Chris Pollard, a CFP in Goshen, New York. In addition to agreeing on hours and pay, talk to your employer about whether you’ll still be eligible for benefits, such as company-provided health insurance and participation in your retirement savings plan. Currently, employers are required to allow part-time employees to contribute to their retirement plan after they’ve worked at the company for at least 500 hours a year for three years, or more than 1,000 hours for one year. Starting in 2025, the eligibility threshold will decline to 500 hours a year for two years. But there’s nothing to prevent your employer from allowing you to contribute to your retirement plan, even if you work fewer hours than that. Sandra Block is a senior editor at Kiplinger Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com. ©2023 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC. Read more helpful retirement articles on Seniors Guide: Retirement and Credit Score Plan to Live Long: Retirement Advice Read More Sandra Block Sandra Block is a senior editor at Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com.