Not stopping completely. Not carrying on full time. Something in between - and for many people, the most sensible and sustainable option of all.
Most early retirement content presents the decision as binary.
You either stop working or you don't. You either reach financial independence and declare yourself retired, or you're still in the game. The narrative tends towards the clean break — the last day, the laptop handed back, the freedom beginning.
And for some people that clean break is exactly right. It's what they wanted and what they planned for.
But it's not the only version. And I'd argue it's not even the most common version among the people actually doing this. What I see much more frequently — in the research, in the conversations I have, and increasingly in my own thinking — is something messier and more human than that. Something in between.
Semi-retirement.
Not a compromise. Not a halfway house. Not what you do when you can't quite afford to stop properly. For many people, a deliberate choice — and one that deserves a proper treatment rather than a footnote.
What semi-retirement actually means
The term gets used loosely so it's worth being precise.
Semi-retirement means you've stepped back from full-time employment - but you haven't stopped earning entirely. You're working less. On different terms. Doing something you've chosen rather than something you're obligated to. The balance between work and freedom has shifted substantially in your favour - but it hasn't swung entirely to zero.
That might look like different things for different people.
For some it's consultancy - using the knowledge and experience from a long career on a project-by-project basis, without the politics, the hierarchy, the commute or the full-time commitment. For others it's part-time employed work - two or three days a week in a local role, something that provides income and social connection without consuming the week. For others still it's a monetised interest - photography, tutoring, gardening, writing, coaching - something they'd do anyway but that also generates an income. And for some it's seasonal or occasional work - concentrated bursts of earning with long stretches of genuine freedom in between.
What these have in common is choice. The person doing the work has decided to do it, on terms they've negotiated. They're not there because they have to be. They're there because this particular arrangement, at this particular point, suits their life.
That distinction - between working because you choose to and working because you must - is the heart of what semi-retirement is about.
Why the numbers make a compelling case
Let me put a specific figure on the table - because I think it changes how people think about this.
Suppose a household needs £35,000 a year to live comfortably in retirement. If one partner generates £10,000 a year from part-time or flexible work, the amount that needs to come from the retirement pot drops to £25,000. That's a 29% reduction in annual drawdown.
Over twenty years, the compounding effect of that reduced withdrawal rate is significant. A pot that might have been depleted or uncomfortably reduced after two decades at £35,000 a year could last substantially longer at £25,000. The risk of running out of money in later life diminishes considerably.
There's a useful way to think about this from the other direction too. At a 4% sustainable withdrawal rate - the commonly cited rule of thumb for how much you can draw from an invested pot annually without depleting it - £10,000 of income is equivalent to having an additional £250,000 in your retirement pot.
Not £250,000 you had to save. £250,000 equivalent generated by working one or two days a week doing something you enjoy.
That's a remarkable exchange rate. And it makes the case for semi-retirement not as a financial compromise but as a genuinely smart financial strategy — one that extends the life of the retirement pot, reduces sequence of returns risk, and maintains a meaningful income buffer without requiring decades of additional full-time employment.
There's a tax dimension worth noting too. If your only income is from part-time work below the personal allowance - currently £12,570 (as at April 2026) - you pay no income tax on it at all. Combined with ISA withdrawals, which don't count as income, you could be running a comfortable household on a combination of modest earned income and ISA draw-down while paying virtually nothing in tax. That efficiency doesn't have an equivalent anywhere else in the retirement income landscape.
What the research says about semi-retirement and health
This is where the evidence becomes particularly interesting - and somewhat counter-intuitive.
As we covered in the health and wellbeing post, the research on retirement and health is more nuanced than most people expect. Full retirement isn't straightforwardly good for health. The outcomes depend significantly on the circumstances of the transition and what the person retires into.
Recent research using data from the English Longitudinal Study of Ageing found something striking. Semi-retired individuals - particularly those who changed employers or roles around retirement age - showed better outcomes for memory, mental health and physical well-being than both those who remained fully employed and those who stopped completely. Full retirement was associated with declines in cognitive function and mental health in ways that partial work engagement appeared to mitigate.
The reasons aren't hard to understand. Work - when it's meaningful, manageable and chosen - provides cognitive stimulation, social connection and a sense of contribution. These are precisely the things that protect health and well-being in later life. Semi-retirement maintains them in a more sustainable form, without the stress and demand of full-time employment.
This doesn't mean everyone should semi-retire. It means the binary framing - full stop versus full employment - may not serve people's health interests as well as a more gradual, chosen transition. For many people, continuing to work in some capacity - on terms they've set - may be better for their long-term health than stopping entirely.
The most common routes into semi-retirement
- Consultancy
For people leaving professional or senior roles, consultancy is the most natural route. You take the expertise, the network and the reputation you've built over a career and offer it on a project basis - without the overhead of employment. You set the rate. You choose the clients. You decide how many days you're available and when.
The advantages are substantial. You're doing work you know. The earning rate per day is typically higher than an equivalent employed day rate because you're not receiving benefits or holiday pay. You control the schedule.
The disadvantages are equally worth naming. Work is inconsistent - some months busy, some quiet. You're responsible for your own tax and National Insurance. Finding clients takes longer than most people expect, particularly if you're starting from scratch after leaving. And the discipline of not taking on more than you want - of maintaining the boundaries that make consultancy semi-retirement rather than just self-employment - requires constant vigilance.
The key preparation point for consultancy is timing. The groundwork is much easier to build while you're still employed - maintaining professional relationships, signalling your intentions to trusted contacts, possibly even agreeing a retained arrangement with your current employer before you leave. Once you've left, re-entry into a professional network takes longer and requires more effort.
- Part-time employment
A local role, two or three days a week, doing something enjoyable or useful. This is often underestimated as an option because it feels less financially significant than consultancy — the day rate is lower, the earnings more modest. But for many people it's actually the most sustainable form of semi-retirement because it provides something consultancy doesn't: reliable, predictable income with social structure built in.
The search for this kind of role deserves a different mindset from job hunting during a career. You're not looking for advancement or salary maximisation. You're looking for something local, manageable and enjoyable. The criteria are fundamentally different - and worth articulating clearly before you start looking.
- Monetised interests
Photography, writing, tutoring, music teaching, gardening, crafts, coaching, dog walking, local guiding. The range of interests that can generate a modest income is wider than most people think - and the barriers to entry have been significantly lowered by online platforms and marketplaces that didn't exist a decade ago.
The realistic expectation here is supplementary income rather than significant earnings. A few thousand pounds a year that reduces pressure on the retirement pot and covers a specific cost - a holiday, a car, a regular bill - without consuming your week or compromising your freedom.
The test isn't whether it makes you rich. It's whether it pays for something real while doing something you enjoy. By that measure, many monetised interests represent excellent value.
- My own position — and being honest about it
I want to be straightforward here about where I actually am. Because a post about semi-retirement written by someone with a clear, established semi-retirement arrangement would be a different post from this one.
I've stepped back from full-time work. That decision was deliberate and I'm comfortable with it. But what semi-retirement looks like for me - whether it looks like anything at all — is genuinely unclear right now.
I haven't ruled out working again in some form. If the right opportunity came along - something local, something that used what I know, something on my own terms with no overnight stays required - I'd consider it seriously. But I'm not looking. Not actively. And I think that's the honest position for where I am.
Right now, a few months into this, I'm largely just enjoying not working. The mornings. The walks. The absence of the diary. The Tuesday evenings that are just Tuesday evenings rather than hotel stays in a city I didn't choose to be in. There's real value in that - a decompression that I think I needed and that I'm allowing myself without guilt or hurry.
Whether something emerges from that space - a consultancy arrangement, a part-time role, something I haven't thought of yet - I genuinely don't know. I'm not trying to engineer it. I'm trying to be open to it if it appears on the right terms.
I think that's probably a healthier starting position than having a rigid plan. The semi-retirement that works best tends to be the one that fits the life you're actually living — not the one you designed in advance from a spreadsheet.
That said - I also know that complete disengagement from work for an extended period makes re-entry harder if you want it later. Professional networks thin out. Skills feel less current. The conversations that lead to opportunities happen in contexts you're no longer part of. So there's a gentle countervailing consideration — not enough to drive me back to work before I'm ready, but enough to keep a door open rather than closing it entirely.
How to think about it for your own situation
Whether semi-retirement is right for you, and what form it should take, depends on things that are specific to your life. But there are some questions worth sitting with.
Do you actually want to stop completely? Not whether you can afford to - but whether you want to. Some people genuinely do. They've spent decades doing work they were obligated to do and the idea of never doing it again is the goal. Others discover, once the initial relief of stopping has settled, that they miss the engagement, the contribution, the structure. Being honest about which you are - rather than assuming you should want one or the other — is the starting point.
What would good part-time work actually look like? Not abstractly - specifically. What type of work? In what setting? How many days a week and on what terms? What travel requirement would be acceptable? What wouldn't be? If you can't answer those questions concretely, the search for the right opportunity is harder.
Does your financial plan require it? For some people semi-retirement is a preference - something they'd choose even if the money were completely sorted. For others it's a practical necessity - the pot isn't quite large enough to sustain full retirement without an income supplement. Knowing which applies to you changes how urgently the question needs answering.
What does your partner think? If one partner is still working full time and the other is neither retired nor working in any meaningful sense, there's a dynamic worth thinking about. Not a problem - but a consideration. What's the shared understanding of what the arrangement looks like and how it might evolve?
The thing most people don't say
There's something in the semi-retirement conversation that tends to go unsaid. So I want to say it.
"It's okay not to know yet."
The early retirement content landscape is full of people who have it figured out - the consultancy that generates exactly the right income, the hobby that turned into a business, the portfolio of activities that provides purpose and income and social connection in perfect balance.
Most people's experience is messier than that. They stop work. They decompress. They figure out what they actually want from the next phase rather than deciding in advance. They follow the opportunities that appear rather than pursuing a predetermined plan. They remain open to the possibility of working in some form without engineering it.
That's not drift. That's a reasonable way to navigate a genuinely novel phase of life - one for which there's no established template and no single right answer.
Semi-retirement, if it happens, tends to emerge from that openness rather than from a plan drawn up before you've lived a single day of retirement.
Which is to say - you don't need to have this worked out before you stop. You just need to remain open to it as one of the options available to you.
Tony writes about his personal journey to early retirement at freebefore65.co.uk. He is not a financial adviser. All content reflects his own experience and research and should be taken as a starting point for your own thinking, not as professional advice.
Add comment
Comments