The New ‘Work-Optional’ Retirement: How Boomers Are Redefining Life After 65
Written by
Laura Bogart
Edited by
Kristen Mae
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You may think of your work life in two distinct eras: the years you climbed the career ladder and the golden years of retirement, when the only climbing you need to do is on an afternoon hike.
But you may worry that without the mental stimulation of the workday, you’ll drift into boredom. You may also be concerned about the lack of reliable income — especially as the cost of, well, everything continues to rise. If only there were a middle ground: a “work-optional” retirement that lets you enjoy freedom while still building stable sources of income and benefiting from the perks of work.
That’s exactly the kind of retirement many baby boomers are creating. Not only are boomers working longer, but many are also embracing a phased approach to retirement.
Transamerica reports: “Sixty-five percent of baby boomer workers plan to work past age 65 or do not plan to retire. More than half (52%) plan to continue working after they retire … For most baby boomer workers, retirement is no longer a point in time in which one immediately stops working.”
So what does this approach look like — and how can you plan for it now? GOBankingRates spoke to experts to find out.
Letting Go of Old Mindsets
Jannese Torres, a financial educator and author of “Financially Lit!,” has watched a major shift away from the decades-old mindset that you work for 40 years so you can retire at 65. Though Torres focuses mostly on millennials, she said the attitude shift crosses generations.
“What I’m seeing across the board is a change in how people define retirement itself,” she said. “That might mean fewer hours, contract roles, remote work or projects that tap into their passions … For most people I work with, ‘retirement’ isn’t about checking out of life. It’s about having the time and space to prioritize what matters.”
This perspective aligns with what James DesRocher, a financial advisor at TrueView Financial, is hearing from his own clients.
“The modern retiree doesn’t necessarily want to sit still,” he said. “Many of my clients tell me, ‘I don’t want to stop working — I just want to stop needing to.'”
To DesRocher, once your investments and passive income streams can cover your living expenses in retirement, earning a paycheck becomes optional. That’s the foundation of financial freedom — and financial freedom means choice.
Creating Real Security Through Diversification
Giving yourself the freedom to spend your golden years as you choose — whether that means going part time to stay socially connected, consulting on passion projects or volunteering — starts with a solid financial foundation.
DesRocher encourages clients to build multiple, coordinated income streams that can eventually replace the traditional paycheck. Some of these include:
- Investment portfolios generating dividends and long-term growth
- Annuities or guaranteed-income products that provide more stable cash flow
- Real estate or side ventures creating supplemental income
“When these streams are structured correctly, they create a reliable foundation that covers your lifestyle needs — without needing a job to fund it,” he said. “That’s the moment many clients say they finally feel ‘free.'”
Strategizing a Smooth Transition: Phased Retirement
Boomers are increasingly leaning into phased retirement — gradually cutting hours or reducing responsibilities instead of simply accepting a gold watch and heading out the door — because of both the practical and emotional benefits of continued work.
“It’s both practical and emotional: it allows your finances to adjust while you test what a freer lifestyle feels like,” DesRocher said. “You might shift from full time to consulting, from managing people to mentoring them or from corporate work to personal projects.”
Holding on to income for a few extra years can also strengthen your Social Security benefits. And through the trial-and-error process of reducing work hours and adjusting income, you can refine your long-term retirement strategy.
Planning for Social Security and Health Care Costs
DesRocher notes that extending your time in the workforce can boost your Social Security benefits, especially if you delay claiming. It can also help bridge health care costs if you plan to retire before you’re eligible for Medicare.
“A thoughtful plan coordinates these benefits alongside your investments, annuities and tax strategy so that every piece supports the others,” he said.
Finding Purpose Instead of Pressure
While the idea of continuing to work in some form may seem daunting, the goal of phased retirement is to focus on work that feels meaningful — not mandatory.
“When financial freedom is achieved, purpose often replaces pressure,” DesRocher said. “People rediscover creativity, community and contribution — whether that’s volunteering, mentoring or finally starting the small business they’ve been dreaming about for years.”
He encourages people to think of this stage not as the end of work, but as an evolution of it. Picture it: What would your days look like if you prioritized what matters most instead of what simply pays the bills?
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