Preretirement

Preretirement is the period preceding an individual's formal withdrawal from full-time employment. It encompasses financial, health, and lifestyle planning aimed at maintaining financial security and well-being in retirement. The timing and activities of preretirement vary by country, culture, insurance/retirement systems, and personal goals; many people view the late 40s through the 60s as the core preretirement years, but some begin earlier or later.

Financial preparation focuses on building and preserving resources that will fund retirement. This includes assessing pension benefits, Social Security or government programs, personal savings and investments, and expected investment returns. Planning typically involves reducing debt, estimating retirement expenses, managing taxes, and developing withdrawal strategies that consider inflation and longevity risk.

Work and lifestyle decisions are common in preretirement. Some individuals pursue phased retirement, reducing hours or shifting to less demanding roles while remaining employed. Others undertake retraining to remain marketable, explore flexible work arrangements, or transition to volunteer or part-time activities. Health maintenance and preventive care are emphasized to support independence in later years; long-term care planning is often included.

Risks in preretirement include underfunding, adverse market performance, longer-than-expected lifespans, rising healthcare costs, and caregiving responsibilities. Tools used in preretirement planning include retirement calculators, financial advisors, employer retirement programs, and policy provisions that affect benefits. The process aims to align financial resources with desired retirement timing and lifestyle.