As highlighted in a New York Times article, many older Americans, like Pat Sterner, find themselves tiptoeing into retirement rather than diving in headfirst. Pat, who runs her own business consulting for nonprofits in Duluth, Minnesota, dreams of spending more time kayaking on Lake Superior. Yet, despite the allure of more leisure time, she’s not quite ready to close up shop. Her concerns about financial stability and leaving the business she built mirror those of millions who are close, but not quite ready, for full-stop retirement.

For many, retirement isn’t simply a matter of giving two weeks’ notice. Instead, it’s a gradual process that requires careful planning and decision-making. Whether you’re considering a phased retirement or planning to work until you’re 70 to maximize your Social Security benefits, there are several key steps to take as you navigate this transition.

Step 1: Understand Your Social Security Benefits

The age at which you decide to take Social Security is crucial. It impacts not only your monthly benefits but also your overall financial strategy. According to the Social Security Administration, the full retirement age for most people is around 66½. However, you can start receiving benefits as early as 62, though this will result in lower monthly payments. If you can wait until 70, you can maximize your benefits, receiving an 8% annual increase for each year you delay past your full retirement age.

To help with planning, consider using the Social Security Administration’s Retirement Estimator. This tool can provide a personalized estimate of your future benefits based on your actual earnings history.

Step 2: Consider a Phased Retirement

Phased retirement programs allow you to gradually reduce your work hours while transitioning into full retirement. These programs are increasingly popular, with many employers recognizing the value of retaining experienced workers. The Bureau of Labor Statistics reports that the labor force participation rate for those over 65 is around 19%, reflecting a growing trend of older adults staying in the workforce longer.

If your employer offers a phased retirement program, it can be an excellent way to ease into retirement while maintaining a steady income. This approach also provides time to adjust emotionally and financially to the changes retirement brings.

Step 3: Plan Your Finances

Careful financial planning is essential during this transitional period. Start by reviewing your current income and expenses. Ask yourself, “What are my expenses now, and how might they change once I retire?” This is a question Pat Sterner discussed with her financial advisor, Sam Brownell, a chartered financial analyst with Stratus Wealth Advisors.

On the income side, you’ll need to consider how reduced earnings will impact your retirement accounts, such as your 401(k) or SEP-IRA. Tools like Personal Capital can help you track your spending, manage your investments, and plan for retirement.

For those considering delaying Social Security benefits until age 70, it’s important to assess your cash flow during that time. The increase in benefits can be significant, especially if you were born after 1943, with an 8% annual increase per year of delay.

Step 4: Seek Professional Help

Transitioning into retirement can be complex, and it’s okay to seek professional advice. A fee-only certified financial planner can help you navigate this process without trying to sell you investment products. Websites like NAPFA can help you find a fee-only planner who charges by the hour or a flat fee.

In addition to managing your investments, a financial planner can assist with setting retirement goals and creating a plan to achieve them. For example, Pat Sterner wanted to focus more on her local community as she phased out of her national and international work. A financial planner can help align your financial strategy with your personal goals.

Step 5: Set Clear Retirement Goals

As you approach retirement, it’s important to think about what you truly want to do with your time. Whether you envision partial or full retirement, having specific goals can help make the transition smoother. For Pat Sterner, one of her goals is to spend more time volunteering in her local community, something she finds deeply fulfilling after a career spent working on a national and international scale.

Consider what activities bring you joy and fulfillment. Whether it’s spending time with family, traveling, pursuing hobbies, or volunteering, having clear goals can provide a sense of purpose in retirement.

Retirement is a significant life change, but with careful planning and reflection, it can also be an exciting new chapter. Take the time to understand your Social Security benefits, consider a phased retirement, plan your finances, seek professional help if needed, and set clear goals for your retirement years.

What steps are you taking as you approach retirement? We invite you to share your experiences, tips, and questions in our Age Brilliantly Forum.