My brother just died, and I’m done wasting my life working — but I can’t afford to quit. Is a ‘soft retirement’ the solution?

The big question in this case, then, is how to decide if the choice you’re making actually makes sense.

Let’s pretend, for example, that Carl’s brother Tim just died. Carl is 57, and he’s hated his job for a long time, but now that Tim has died, he’s decided he’s done. Carl doesn’t want to waste another minute, as Tim’s death reminds him how fragile and fleeting life can be.

Unfortunately, Carl can’t afford to quit entirely. So, he’s wondering if a “soft” retirement is the solution.

What is a soft retirement?

Once upon a time in America, retiring from a decades-long job with a gold watch and a pension plan seemed within reach.

Today, however, many older workers aren’t planning to hit 65 and quit cold turkey to enjoy a life of leisure. Instead, either out of necessity or desire, nearly half of Americans now expect to transition into retirement gradually. This typically means tapering down working hours but continuing to work in some capacity into old age.

“Retirement doesn’t have to mean quitting work entirely,” Mary Ware, senior wealth advisor and managing partner of Carnegie Private Wealth, told Moneywise. “Even a modest amount of additional income in retirement can have a big impact on the longevity of your nest egg.”

Carl, for example, might decide to give up his time-consuming, stressful full-time job and find something more flexible, even if that means taking a big pay cut.

Could a soft retirement work?

So, would a soft retirement work for Carl? A lot depends on his finances and long-term goals.

“You must know how much income you need to earn to support your expenses in today’s dollars and with a minimum assumption of 2.5% inflation in future years,” Ware said. “It’s critical to have a plan that tests your ability to meet not only the basic needs but the goals that you have for retirement, such as travel. Your plan should also test your ability to fund long-term care needs.”

Ware warned that because Medicare doesn’t start until age 65, Carl could end up forced to cover health insurance premiums if he quits his full-time job and takes on a series of side gigs or contract work that don’t offer coverage. This could affect the income he needs and should be taken into account.

Domenick D’Andrea, founder of DanDarah Wealth Management, also warned of the broader financial implications of stopping work at such a young age, especially if Carl was making good money. “To start, Social Security works off your highest 35 earning years, so by lowering your earnings you could also be lowering your Social Security payout,” D’Andrea told Moneywise.

D’Andrea also pointed out that Carl may not be able to access some of his retirement savings until age 59.5 unless he follows the 72(t) rule (aka the substantially equal periodic payment rule) that allows him to make withdrawals from retirement accounts on a set schedule without penalty.

“You need to not just look at how this will affect you now but also in your future,” D’Andrea warned.