Retirement used to be a clearly defined milestone: work 40 hours one week, receive a warm handshake and a carriage clock on Friday, and wake up to a life of leisure on Monday.
But that sudden transition—from full-time employee to full-time retiree—can sometimes be a shock. It may have financial consequences, and for many people, it brings unexpected physical and emotional challenges. After 40 or 50 years of routine and purpose, suddenly having “nothing to do” can feel unsettling.
To avoid this abrupt change, many people are now choosing a “soft retirement.”
What Is Soft Retirement?
Soft retirement is a phased approach to leaving the workforce. Rather than stopping work entirely, you reduce your hours, take on consulting or freelance roles, or pursue passion projects—on your own terms.
You don’t need to wait until 65. With the appropriate financial planning, a soft retirement could potentially begin in your 50s—or even your 40s.
Why Consider It?
There’s more to life than work. A soft retirement may give you a better work/life balance, and more time to enjoy what really matters—family, travel, hobbies, and wellbeing.
Just as you built skills to succeed at work, you need to develop the skills for a fulfilling retirement. Leisure isn’t automatic; it takes intention. Phasing into retirement may allow you to explore interests gradually, rather than confronting a sudden void.
What’s the Catch?
The key challenge is financial.
If you want to reduce your working hours—or stop work entirely—before age 55, you’ll need access to income outside of a pension. That’s because most pension pots are locked until at least 55, and that threshold is rising to 57 from April 2028
How to Financially Plan for a Soft Retirement
To retire softly at 40 or 50, you’ll need a flexible and substantial source of income. Here’s what that might involve:
- Start early. The earlier you begin saving and investing, the more you benefit from compounding. Investments made in your 20s or 30s can potentially grow substantially over time.
- Live below your means. A modest lifestyle allows you to save and invest more. This is essential if you’re aiming for financial independence early.
- Build a diversified investment strategy. Include a mix of assets—stocks, bonds, property, and perhaps business interests—aligned to your goals and risk tolerance. Know how much you need to invest each month and track your progress against clear milestones.
- Plan for passive income. Generating income without actively working is vital. This could come from dividends, rental income, or investment portfolios designed to deliver regular returns.
Get Expert Advice
Planning a soft retirement isn’t just about saving more—it’s about making smart decisions that align with your goals. With suitable advice, you can build a strategy that gives you control over how and when you retire.
To explore your options, get in touch with Continuum today.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment or retirement strategy, you should seek independent financial advice before embarking on any course of action
The value and returns of an investment are not guaranteed, investors may lose some or all of their investment. When investing Capital is at risk.
A pension is a long-term investment; the fund value can go down as well as up and this can impact the level of pension benefits available. Pension Income could also be affected by interest rates at the time benefits are taken. Pension savings are at risk of being eroded by inflation
Accessing pension benefits early is not suitable for everyone. You should seek advice to understand your options at retirement.
Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits.
