Rethinking Retirement: 4 Financially Savvy Alternatives

The traditional retirement model—maxing out your 401(k), saving diligently, and exiting the workforce at 65—no longer aligns with everyone’s goals or lifestyle. As attitudes toward work and life evolve, more adults are rethinking what their later years could look like. In fact, a recent Fidelity study found that two-thirds of Americans would prefer a phased retirement, choosing to work for fulfillment rather than financial necessity.

For some, stepping away from full-time work isn’t financially feasible due to rising healthcare costs and the realities of increased longevity. For others, the desire to stay engaged, continue learning, or contribute meaningfully makes a conventional retirement unappealing.

Whatever your vision for retirement, you don’t have to follow a one-size-fits-all approach. In this article, we’ll explore four alternatives to traditional retirement that can be both personally fulfilling and financially sustainable.

Consider these four alternatives to traditional retirement:

#1: Semi-Retirement/Phased Retirement

One of the most common alternatives to traditional retirement is semi-retirement or phased retirement.

Semi-retirement offers a smooth transition from full-time work to full-fledged leisure, allowing you to gradually scale back your hours while maintaining a reliable income. This approach not only provides financial stability but also lets you continue leveraging your expertise, staying engaged in your field, and benefiting from professional connections.

While reduced work hours naturally mean lower earnings, strategic planning can help bridge the gap. For instance, you might consider taking partial withdrawals from retirement accounts to supplement your income. However, a thoughtful approach is key to avoid unnecessary tax burdens.

Additionally, be mindful of how reduced hours impact benefits like healthcare coverage and employer retirement contributions, as many plans require minimum work hours to maintain eligibility. Similarly, if you plan to collect Social Security benefits while working part-time, keep in mind that your earnings could impact your benefit amount if you haven’t reached your full retirement age (FRA).

In 2025, if you haven’t yet reached your FRA, the Social Security earnings limit is $23,400. This means for every $2 you earn above this threshold, the Social Security Administration will deduct $1 from your benefits. However, once you reach FRA, these deductions no longer apply, and your benefit amount will be recalculated to account for any prior reductions.

#2: Second Act Retirement

A Second Act retirement is all about transformation—turning your later years into a time of reinvention, fulfillment, and purpose. Whether that means launching a new career, pursuing a long-held passion, or dedicating yourself to philanthropy, this alternative to traditional retirement allows you to channel decades of experience into work that truly excites you.

That said, a successful Second Act requires careful financial planning. Transitioning into a new field may come with upfront costs, such as education, certifications, or a period of lower earnings while you gain experience. Establishing a dedicated transition fund, separate from your core retirement savings, can serve as a financial cushion, giving you the flexibility to explore new opportunities without compromising your long-term security.

Before making a full commitment, consider testing the waters through part-time work, volunteering, or side projects. This gradual approach allows you to refine your direction, gain confidence, and make informed adjustments—ensuring that your Second Act is both financially sustainable and personally fulfilling.

#3: Entrepreneurial Retirement

More retirees than ever are choosing entrepreneurship over full-time leisure, using their experience and skills to build businesses that provide both financial stability and personal fulfillment. A 2019 Inside Small Business survey found that 65% of respondents planned to start a business upon retiring, highlighting the growing appeal of an active, purpose-driven retirement.

While an entrepreneurial retirement can be financially rewarding, it also comes with unique challenges. Unlike traditional retirement planning—where savings are primarily directed into 401(k)s and IRAs—this approach often involves redirecting capital toward business ventures. Striking the right balance is critical as you’ll need to invest strategically while maintaining long-term financial stability.

Additionally, every entrepreneurial venture should include a clear exit strategy. Whether your plan is to ultimately sell the business, transfer it to family, or implement management systems to reduce your involvement, having a roadmap helps ensure your business remains a valuable asset, continuing to generate income even as you step back.

As an increasingly popular alternative to traditional retirement, entrepreneurship comes with distinct opportunities and challenges. However, with thoughtful planning and a strategic approach, this path can offer financial independence, flexibility, and a meaningful way to shape your legacy in your later years.

#4: Geographic Arbitrage/International Retirement

Many retirees are choosing to relocate abroad to stretch their retirement savings further—without sacrificing, and often improving, their quality of life. By settling in destinations where housing, healthcare, and daily expenses are significantly lower than in the U.S., it’s possible to enjoy a more comfortable and financially sustainable retirement.

In recent years, countries like Panama, Portugal, Costa Rica, and Spain have become increasingly popular among American retirees. These destinations rank highly on International Living’s 2025 Global Retirement Index for their affordability, modern infrastructure, and high standard of living, including access to excellent healthcare.

Access to quality healthcare is a key factor when planning an international retirement. Many countries provide top-tier medical care at a fraction of U.S. prices, but availability, standards, and costs vary widely. Since Medicare doesn’t cover medical expenses abroad, securing international health insurance or enrolling in the local healthcare system (where available) is essential for ensuring adequate coverage.

Living abroad can also introduce unique financial challenges, particularly currency exchange risks and tax obligations. Since most retirees rely on Social Security, pensions, or investment income in U.S. dollars, it’s important to plan for potential currency fluctuations that could impact purchasing power. Diversifying income sources and using local bank accounts can help mitigate these risks.*

Additionally, U.S. tax laws still apply to citizens abroad, which can make tax planning more complex. While tools like the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC) can help minimize tax liability, consulting a tax professional with expertise in expatriate finances is crucial before making the move.

Alternatives to Traditional Retirement: Redefining Retirement on Your Terms

Retirement is no longer a one-size-fits-all journey. Whether you choose to ease into retirement through phased work, embark on a Second Act career, build a business, or relocate for geographic arbitrage, the key is crafting a plan that aligns with your values, priorities, and financial realities—not just conventional expectations.

No matter which path you take, certain financial fundamentals remain essential: emergency savings, healthcare planning, and regular financial check-ins to ensure long-term security. Each alternative to traditional retirement comes with its own trade-offs, requiring thoughtful planning and strategic decision-making.

Partnering with an experienced financial advisor can bring clarity and confidence to your retirement planning. At SageMint Wealth, we specialize in helping high-net-worth individuals, families, and business owners navigate the complexities of retirement with a strategy tailored to their unique goals. Our team will design a personalized financial plan that empowers you to step into your next chapter with purpose. Contact us today to start pursuing the fulfilling retirement you’ve envisioned.

*There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.