Phased retirement holds its share of mysteries, and is often misunderstood.

Given the shortage of workers in many industries and the aging population, many employers see progressive retirement as a win-win situation. It allows society to benefit from your skills and experience, while providing you with more freedom.

Here are the main things to consider in order to make an enlightened decision.

How to set up a phased retirement | Multi-Prêts Mortgages

What is phased retirement?

When a person over 55 years of age seeks to gradually withdraw from the job market, phased retirement can be an option. It allows for the introduction of more free time into an active part-time work schedule. More importantly, it allows you to keep contributing to your retirement fund while receiving partial benefits.

Between the ages of 55 and 59, your income will come from your salary and partial benefits from your pension plan. After that, you will also receive your QPP benefits.

On Retraite Québec’s website, it is stated that “you could, under certain conditions, work part-time or even full-time and receive up to 60% of your retirement benefits.” As each situation varies, it is highly recommended to meet with a financial planner to make sure you’re coming out on top. However, in most cases, it is possible to maintain a similar lifestyle.   

Retraite Québec’s website offers tools to help you simulate a phased retirement, giving you a good idea of the financial impact.

To help you prepare, read up on the 3 mistakes to avoid when planning your retirement.

In the same vein, your property could finance your retirement. To learn out more, read up on retirement planification and reverse mortgage

How to set up a phased retirement | Multi-Prêts Mortgages

How to become eligible

As previously mentioned, phased retirement is only offered to those aged 55 and up. The employer must give his blessing and go over the new salary and schedule with you. It may be necessary to review your tasks to ensure they fit in your reduced schedule.

It goes without saying that some businesses and industries are better suited for this type of arrangement than others.

Getting mentally prepared

Are you better off working half-days five days a week? Would you rather have shorter three-day work weeks? Are you considering projects that would require longer vacation periods?

No matter how you decide to arrange your schedule, it’s up to you to find a solution that best suits your needs, as well as those of your employer. On a yearly basis, phased retirement sees people working 24 hours a week, on average.

You also have to keep in mind that some of your expenses may be reduced. For example, if you’re working a three-day work week, the expenses brought on by your job (food, transportation) should normally be reduced as well.  

Contact your Multi-Prets broker to find all the options available to you

Key takeaways

  • When a person over 55 years of age seeks to gradually withdraw from the job market, phased retirement can be an option.
  • On a yearly basis, phased retirement sees people working 24 hours a week, on average.
  • You could, under certain conditions, work part-time or even full-time and receive up to 60% of your retirement benefits.
  • The employer must give his blessing and go over the new salary and schedule with you.