Last updated: Jun 06, 2024

Is a ‘hybrid’ approach the answer to modern retirement?

Michael Harms AFPS
Director & Chartered Financial Planner at Mortgages for Doctors

Is a ‘hybrid’ approach the answer to modern retirement?

The traditional concept of retirement, where we work tirelessly for decades and then abruptly stop to collect our carriage clock, hang up our briefcase and enjoy a leisurely life on the golf course, is undergoing a profound transformation.

There are many reasons for this: increased life expectancy, changes in employment patterns, and economic uncertainties are all contributing. As we now live longer, healthier lives, we seek meaningful and purposeful engagement beyond our traditional careers. This shift has blurred the lines between work and retirement, paving the way for the hybrid retirement concept.

Hybrid retirement introduces a much more flexible and dynamic way of transitioning from full-time work to a life that balances work, leisure, and purpose.

So is a hybrid retirement model realistic? Let’s take a look.

If you enjoyed your job, would you want to retire?

According to a 2021 study from The Times, one in ten people over 50 who were working entirely from home during the pandemic said they were more likely to retire later — double the proportion of those who were working from an office.

It seems as though once we remove the aspects of work that make our jobs less enjoyable, we’re not as desperate to retire.

If we could find ways to shape our careers to suit us, perhaps we wouldn’t mind spending another five or ten years in the workforce?

Is work good for us?

I know this might not be what you want to hear - and there isn’t yet any concrete evidence proving this to be true - but some studies suggest work can be good for us.

Researchers analysed data from two large surveys on how Americans use their time and discovered that not only can too little leisure time impact our wellbeing in a negative way, too much leisure time can have a similar affect. It seems like there’s a sweet spot to be found. By balancing the two, could we find more fulfilment?

None of this is to say that working longer will lengthen our lifespans. The jury’s out on that one, with some studies suggesting early retirement is the key to a long life and others suggesting you’re better off retiring after 65.

What would hybrid retirement look like?

Hybrid retirement can look different from one person to another. It’s all about finding ways to maintain the aspects of work that you enjoy, while ditching the bits that make it hard to get out of bed in the morning.

For business owners, hybrid retirement might involve outsourcing their day-to-day tasks so that the amount of involvement they have with their business is minimal. The more passive their income, the better.

Other self-employed workers may take on the occasional project only when it pays exceptionally well or looks particularly enjoyable.  

It’s not uncommon for people to retire only to miss the social element of work. For them, working in a coffee shop may give them the sense of community they long for, while others may fulfil a lifelong dream of opening their own cafe by the beach.

So how do you achieve this?

With our experience, we can help. We can find ways to explore the impact a hybrid retirement will have on your overall financial plan, and whether we need to adjust anything to suit it.

Naturally there are numerous financial benefits to simply delaying retirement and continuing to save and invest while you work. Not only will you continue to have an income in your later years, you’ll also have more money to enjoy in the present. The benefits don’t stop there. Your investments also have more time to compound.

Compounding refers to the process by which the returns on your initial investment generate additional earnings over time. In simpler terms, it's making money on your money, and then making money on that additional money, creating a snowball effect. As your investment grows, the returns start to generate their own returns, leading to exponential growth over an extended period.

With the help of intelligent financial planning, you explore these concepts in more detail, talking you through how you can shape your life to look exactly how you want it to — without sacrificing all the fun bits in the now.

Book a call with us

Why not book a free consultation call with one of our mortgage advisers?

Read more articles