Running a business can be overwhelming. It’s easy to feel stretched thin, and like there’s never enough hours in a day. At times, you’ll probably fantasize about retiring early, ditching the suit for sandals, and kicking back on a beach somewhere.
However, these fantasies can come from thinking you’re in a retirement binary. One where you’re still working and saving, or you’re done forever. But as a business owner, there’s a third option- a semi-retirement.
Is a work-free life really what you want?
The reality is, work often plays a major role in keeping our lives moving forward, and feeling meaningful. And that’s been backed by studies on unemployment and retirement. One study conducted by the Department of Economics at Washington and Lee University, found that long-term unemployment had significant negative impacts on one’s mental health. And that these effects were particularly acute in those with more education.1
Another Federal Reserve study found that 30% of its respondents eventually returned to work even after retiring early due to burnout. This significant portion of those studied felt that retirement didn’t necessarily mean the end of work itself, and many didn’t enjoy not working.2
As a successful business owner, there’s no question that you’ve worked hard. But a switch to a completely work-free life may leave you unfulfilled and unhappy. If you’re looking to spend less time at the office, you may want to consider stepping back before wiping your hands clean.
Have you considered a semi-retirement?
A semi-retirement offers many perks. For one, you get to retain your ownership status while exploring a variety of work-life balances. This in turn can help you rekindle old passions, find new hobbies, and spend more time with the people and causes you care about.
Additionally, semi-retirements aren’t etched in stone. Compared to selling your business, or hiring a CEO, the changes are far more reversible. With a more flexible retirement, you’re given plenty of breathing room to continue experimenting, or return to prior ways.
What does semi-retired mean to you?
Semi-retirement won’t mean the same thing to everyone. Some approaches are very hands off, some just a reduction in scope, and some are a total change in role. Below is a list of ways to get your feet wet in semi-retirement waters:
- Reducing hours: One of the simplest ways to test retirement life is a simple reduction of hours. If you trust your staff, you can stop being the first one in and last one out. And you can start enjoying later arrivals, longer weekends, and more vacation time.
- Shifting roles: As a business owner you’ll often have your hands in multiple functions. But you can redesign your role. With the proper structuring of employees, you can start concentrating more of your time in an area you love (ex: new business sales).
- Advising: Sometimes athletes become coaches after their playing years. And business owners can do the same by shifting to a strategic advisory role. In this position on the management team, you step away from the day-to-day and take on the role of a guide. And you’ll be helping others pass through the trials you already have.
- Ownership only: By far the most hands-off form of semi-retirement, this option outsources everything but your title. You may hire a CEO, and only be involved in the highest-level decisions.
How to prepare for semi-retirement
The best way to prepare for semi-retirement is through proper succession planning. This is the process of designing an action plan for employees to keep the critical components of your business running smoothly even as you dial back your responsibilities. You can explore the avenues of only a partial retirement by considering, and acting upon the following:
- Identifying key positions: It’s imperative that you understand the most valuable roles and employees in your organization. When they’re filled properly you can explore semi-retirement more securely.
- Determine the requirements: Once you understand what roles and employees are most instrumental, you can lay out criteria for their continuation: core skills, experience, and performance needed to do the job(s) right.
- Build a talent pool: After you know the requirements for key positions, you can start building a talent pool. This protects your semi-retirement should a key position become vacant. And it gives you a list of solid candidates to quickly fill any gaps.
- Start training: For the talent inside your organization, start training well ahead of time. If you see potential for your employees to take on more responsibility, develop their key skills for your organization’s most critical roles.
- Communicate in advance: Don’t hide your semi-retirement intentions from your staff. Be open with your employees regarding your direction. This way, they won’t feel blindsided by your actions, and will be on board with your new vision for the company. You may even find that people eagerly take on new leadership roles.
Start your semi-retirement with The Advisory Group
At The Advisory Group, we love helping our business owner clients succeed. It’s a privilege to watch their businesses grow, evolve, and have an impact in the way they envisioned. And it’s even more rewarding to help them fully reap the benefits of all their hard work.
We understand that not everyone wants to drop everything in retirement, especially those who’ve built a business they love. That’s why we specialize in structuring a retirement that fits the needs of our high-achieving clients.
Together, we can help you step into the world of semi-retirement with confidence. And you’ll feel secure as you explore the retirement lifestyle that’s right for you. If you’re ready to take action, set up a complimentary consultation, or call us directly at (415) 977-1200.