In a nutshell, retirement is the idea of escaping the daily grind, so to speak, and few people really give it enough thought to realize that retirement comes in roughly four varieties: Early Retirement, Traditional Retirement, Mini-Retirement, and Semi-Retirement. Naturally, the differences are not astronomical, but they are enough that you would have to consider the type you want carefully to enjoy a better retirement lifestyle that is best suited to your situation in terms of finances, health, and a range of other factors.
This type of retirement is when you hang up your boots between the ages of 25 and 55, and the advantages are obviously permanent financial freedom and the fact that you can enjoy this freedom during the younger years of life. The disadvantage, though, is that you now devote your 20s, 30s, and 40s towards the type of lifestyle usually adopted later in life. For about 10 to 20 years, you tend to defer living life to the maximum — in a way, planning to live till 100. But we don’t really know how long we will live, so having to give up on passions and traveling and spending from a young age can be a drawback.
This is the usual retirement lifestyle where you retire after the age of 55, letting go of the daily grind to adopt a relaxed lifestyle around your saved funds. With this retirement lifestyle, the advantage is that since you are saving money over a much longer period — which is expected to last for a much shorter period — you can get away with putting aside a much smaller fraction of your earnings during your working years. Early retirement, comparatively, requires you to set aside about 50-75% of your income, but traditional retirement is more flexible, beginning from a savings of as little as 15% of your income. However, the fact is that with age comes deteriorating health, and there is no telling what condition your health will be in, also considering that you will have been working up until that age. This also means perhaps living several decades in a sub-optimal lifestyle.
Most of the time, we’re taught that life has two mutually exclusive states — that being a permanent working state and a permanent state of rest (which is retirement). However, there are other avenues less traveled that combined the two and allow more flexibility. Semi-retirement is when you are perpetually semi-working. It can be likened to strolling during a marathon in the sense that you work half the hours of a regular working person and enjoy more time off to enjoy a retirement lifestyle. This is a solution for workers who have more flexible jobs like freelancers, journalists, and entrepreneurs. The advantage is that it can begin at any time in your life, so long as you secure part-time work in some form. The disadvantage is that this does not offer a permanent escape from the daily grind, though if you are able to simultaneously save, it may eventually be a possibility.
This type of retirement lifestyle can be likened to sprints. This is where you alternate periods of rest and relaxation with periods of intense hard work. In a way, you grow to appreciate the periods of rest more and have more fun during those mini-retirements after having worked hard at something. For example, working for 6 months and going into retirement mode for 3 to 6 months – then quit and repeat. This is yet another retirement lifestyle that does not offer a permanent escape or permanent financial freedom. You will eventually have to return to the time-for-money trade before you can enjoy another mini-retirement.
Going into retirement can sometimes be a scary thought for people, especially those who overly worry about the future and the economy and not having enough to survive, among other things. There will always be bills to pay, and going into retirement doesn’t mean that stress and responsibilities completely vanish.
However, going into semi-retirement or beginning to take mini-retirements even though you have been saving towards a permanent retirement can also be a good way to make the transition from working to going into retirement. For others, the prospect of permanent retirement isn’t attractive anymore and here, semi-retirement and mini-retirements can pose a good alternative. Retirement lifestyles are flexible, too!