Introduction

A century or two ago, most people expected to live only into their 30s or 40s and probably felt little need to be concerned about life's second half. Now, we increasingly have a choice about how much and how long to work. A quarter of American families headed by someone between the ages of 45 and 64 could enter semi-retirement today and live at or above the national median income, according to the most recent Federal Reserve Board Survey of Consumer Finances.

If you're one of that group, are you ready to take advantage of your situation? Some of us yearn and plan for retirement and know exactly what we'll do when that happy day arrives. But most of us need help transitioning from our busy working lives into the less-structured -- and saner -- pace of life in retirement.

The 20th century's image of retirement as a leisure-only, 65-and-older lifestyle increasingly doesn't fit our needs or match our self-images or dreams. The term semi-retirement may seem awkward, but it is the best I've found to describe what most people who leave full-time careers eventually find themselves doing. (You may prefer to call yourself early retired, partially retired, or even transitionally retired.) Your activities may feel nothing like Work -- that four-letter-word variety that you gladly left behind -- and they may not even be paid. But if you're finding your way to a congenial blend of responsibilities, challenges, and rewards balanced with plenty of leisure time, then you've discovered semi-retirement and are part of an emerging trend.

I made that change at age 42 and learned a number of valuable and humbling lessons, which are collected in my first book, Work Less, Live More: The Way to Semi-Retirement. This companion workbook was created in response to requests from readers who wanted to apply the principles from that book to their own situations. The hands-on exercises and spreadsheets in this workbook will help you calculate your financial readiness for semi-retirement, rebalance your portfolio, track your fund management expenses, and ensure that your spending stays within the amount you can safely withdraw each year from your savings. You'll find nuts-and-bolts spreadsheets and worksheets to help you ensure that your savings are prudently invested and tapped to meet your financial needs over the long haul.

But no less important are the non-financial chapters, filled with worksheets, encouragement, exercises, and resources to help you tap into your fullest potential for creating a fruitful semi-retirement, whatever form it may take. Many people entering semi-retirement experience a giddy sense of freedom slipping out from the routines, priorities, and commitments that have too long governed their lives. Good planning helps ensure that when the euphoria fades, you'll have plenty of new interests to keep you from feeling bored or homesick for the structure and sense of accomplishment you enjoyed in your old career.

Two of the things I've enjoyed most about semi-retirement have been meeting the many people whose stories are recounted in my books and feeling the encouragement of an extended community of early- and semi-retirees. This workbook offers tips and advice that have helped me -- tips from people who've made this transition themselves, that speak to its triumphs and pitfalls, help you analyze your financial fitness, or help you find your life's calling. Those who've taken the plunge want to share what they have learned and help you join in the adventure. "The water's fine," they are calling. "Here's how to swim, here's where the rocks are, and when you're ready, come on in!"

How Ready Are You?

In the following questionnaire you'll find a wide range of questions based on the experience of semi-retirees. The questions deal with both the carrots that might be luring you on to a dynamic second half of life (wanting to spend more time traveling or with your family, for example) and the sticks that might be painfully urging you to stop whatever you're doing now and find a better way (stress at work, for example). The questionnaire is in two parts -- one section asks you about your stress levels and job satisfaction, and the other section focuses on your financial preparedness.

Taking this test gives you a chance to see how you compare to people who are already semi-retired, or well on their way there. You may be pleasantly surprised to learn that you're already taking the steps that many semi-retirees before you have taken. Or you may see that you are still working toward the kinds of personal finance and personal development goals that will help you prepare to leave full-time work behind.

Though no test can tell you exactly where you stand, this test's questions, scoring, and methodology have been extensively validated by people at each stage of the semi-retirement journey, coming from many different backgrounds and perspectives. Overall, their experience can give you a good indicator of where you are on your path to semi-retirement.

When answering the questions, choose the answer that most closely describes where you are today.

[Is Semi-Retirement Right For You? Checklist] omitted for online sample chapter.

Whether you're close to semi-retirement or have a long way to go, this workbook can help you reach your goals. Read the chapters in order because each chapter builds on the previous one. You'll review your current budget and pull together spending and saving into a concise, informative picture (Chapter 2). You'll learn how to apply the principals of Rational Investing to your portfolio and how rebalance your portfolio annually (Chapter 3). You'll see how you can safely withdraw from your savings to fund your living expenses in semi-retirement (Chapter 4). You'll evaluate your tax situation (Chapter 5). And, you'll take steps toward creating the life you desire (Chapter 6).

Connecting to Your Dreams and Talents

What does semi-retirement mean for you? The closer you can come to tasting that, to feeling almost exactly what an ideal day or month would feel like in semi-retirement, the straighter you'll be able to steer toward that result.

Try Something New

Are you in a rut? How often do you do something in a new way -- go out of your way to meet someone new, visit a new store, try a new product, read a book on a new topic or in a new genre for you, make a new dish, or rearrange your furniture? We all like our routines, and frankly they can be an efficient way to conduct life. After all, having found a favorite café with great coffee and atmosphere, do you really need to keep trying all the other places in town? Still, if we let routine rule all aspects of our lives we can grow stale.

Whether it's trying a new restaurant, finding new part-time work, or discovering a new avocation, early- and semi-retirees have the time to uncover new things. Develop the habit of staying open to fresh experiences -- it can lead you toward new activities that may become immensely satisfying. If you close yourself off to new possibilities, you may well find yourself back at your old job muttering about how semi-retirement is boring or a waste of time. Though discovering your new second-half-of-life avocations can take time and patience -- even sleuth work -- it's worth the effort. The whole point of early and semi-retirement is to reclaim your time, and then do something particularly fun and rewarding with it.

Take a Look at Your Sense of Self

Do you secretly get a charge out of answering the question, "What do you do?" or "Who do you work for"? If so, does the charge come because you are enthusiastic about your firm or work, or is it from knowing that your answer is likely to impress the person who is asking? When you pull out your business card, do you expect the company logo to impress the recipient and make you appear more successful, intelligent, or talented?

Most of us like to associate with winners, and successful organizations use that to attract and retain talented people. But if you let your identity become too bound up with that of your employer, you risk allowing your sense of self and self-esteem to become too tied to your work. Though identifying with an employer and being part of its success is doubtless a good thing for a while, it can eventually make it hard for you to move on to more independent pursuits. And it can keep you tied to an organization long past the time when you should leave. A well-developed sense of self, based on internal values and priorities, will better prepare you for the independent life of a semi-retiree.

Let Your Creative Self Emerge

Here are some tips and techniques I've learned to help get in touch with your creativity. Some of them may sound silly, and they will certainly feel different or even uncomfortable at first. Allow yourself to be silly, just for a few minutes. You may find out something about yourself that you never expected to learn. After all, until we change our thinking, it can be very hard to change anything else about our lives. And semi-retirement is a big change.

Tip 1: Use your nondominant hand

Try doing routine tasks with your nondominant hand for a few minutes or hours each day. If you're a righty, brush your teeth with your left hand. Or try eating with your nondominant hand. Not only will you learn to break long established muscle patterns and habits, but your actual brain and neurocircuitry will get a useful stir. Out of this, new pathways to new ideas have a chance to get started.

Tip 2: Listen carefully to music

Get a set of headphones. With eyes closed, listen intently to a new or favorite piece of music. Follow a single instrument, preferably one that is in the background. Concentrate deeply on that single instrument. This exercise trains your concentration skills in a way that is fun and comfortable. Concentration skills also build new brain capacity -- meditation, a formal type of concentration, actually creates new gray matter. If you've spent years only half-listening to music, it can be a revelation to finally notice what's been there all along. This is a powerful metaphor that can be applied to other parts of our lives -- from relationships to behaviors, or physical environments.

Tip 3: Sketch

If you're not already an artist, try your hand at sketching. It's another way to get new neural pathways going in the brain. Sketching is good because it can be done sitting down with minimal equipment, it is humbling to people who are used to being masterful in everything they do, it is fun, it teaches you to really start observing, it connects you to childlike stuff, and it slows you down. And as an added bonus, you just might come up with something you like. No one needs to see your efforts unless you want them to. My own sketches are generally lopsided. Over time, sketching may help you start to see differently -- to really notice things that have been staring you in the face all along. This can help you find creative solutions to daunting questions whose answers may be right in front of you.

Get a sketch pad or blank sheet of paper, sharp pencil, and eraser and start with something simple. Sketch by looking carefully at a still-life subject, and then work to get each line down on your page in the correct relationship to other lines and parts of the subject. Try shading darker areas to give a sense of three-dimensional form. If you are sketching a person, study closely how each area of the figure connects to the whole. What makes that person unique? How are his or her hands or eyes different from someone else's? What does an eyelid really look like?

Tip 4: Notice your internal chatter

Listen to the internal chatter or dialogue in your head. Notice any themes that emerge. Are you nice to yourself; hard on yourself; hard on others? If someone else said the same things to you, how would you react? If your dialogue is consistently negative, work to replace some of those thoughts with more constructive and kind ones.

Tip 5: Pay attention to your daydreams

Notice things that draw your mind back again and again -- places, people, or experiences. What emotion connects you to that place or time? Is there something there to learn? If possible, go back to those places with sufficient time and clarity of mind to see if any fresh ideas come to you there. This practice can link you more closely to deeper feelings that are unconsciously informing your attitudes and behaviors today.

Tip 6: Notice when you're in the flow

In which activities do you sometimes feel a state of "flow," where time and distractions disappear and you are just deeply immersed in the activity itself, in the moment? Is it possible to organize your time to spend more time doing these kinds of activities?

Tip 7: Make a life list

Make a list of the top ten or 11 things you'd like to accomplish in your life if you had more time and post it somewhere visible. When you semi-retire, your list will be a handy guide for how to fill those days when you realize you have nothing scheduled to do the entire day. Your list will keep you on track like a map and compass, guiding the small steps to create a life that reflects your dreams and values.

Tip 8: Remember your dreams

When you were 18 or 22 years old, what did you love doing or think you might want to be "when you grew up"? If you had all the time in the world, would you want to pick up some of those threads again?

Tip 9: Use your imagination

Imagine a perfect weekend. Where would it be? What would you be doing? Who would you be with? What would be your state of mind? Write down these answers in as much detail as possible. Now do the same thing for an imagined typical week in semi-retirement.

Tip 10: Whom do you admire?

What type of person do you admire? What is it about them or their life, their work, or their activities that appeals to you? Do you wish you could hang out with them or be like them? What steps might be required to get from here to there? How can you learn more about the persons you admire or the activities they are involved in?

Tip 11: Write

Write down fragments of ideas, thoughts about any of these tips, long stream-of-consciousness entries about how you're feeling about work or politics or relationships or the next chapter in your life. Writing down your ideas is a time-honored way to get things moving around you -- either to process and get past something that has been bothering you or to start weaving the threads together for something new and useful to happen. Whether or not anyone reads what you write doesn't seem to matter -- it's the act of writing that counts. Pictures, diagrams, and scribbles are all nice additions to plain old words.

Tip 12: Ask yourself for help

Before falling asleep, frame a question that is puzzling you, from "What should I do with the rest of my life?" to "How can I learn more about welding?" Keep a notebook handy and write down any ideas that come to you during the night or first thing upon waking in the morning. Follow up on those ideas.

Tip 13: Retreat and renew

Go on a silent retreat in a monastery or spend a few days hiking and camping at high elevation. Try to give yourself a little free time upon returning, with a notepad or sketchpad handy. New ideas and perspectives typically come to people after such experiences.

Tip 14: Give yourself encouragement

Cultivate confidence in your new ideas -- take them seriously by writing them down, acting on them, talking about them with others, or otherwise tending them as if they were seedlings in a garden. Some will wither away, but others, with time and care, can grow into something of substance. Look for inexpensive ways to explore and expand on your ideas until you see which ones have the potential to grow. For instance, rather than jump straight in and open an art gallery as your first step in semi-retirement, try visiting with art gallery owners, volunteering at a local co-op gallery, or even getting a part-time job or internship in an established gallery. None of these steps are expensive or difficult, and you can learn a lot about your dream of owning a gallery without breaking the bank or becoming emotionally distraught if things don't work out.

Tip 15: Take the long view

Figure out how to salvage something of value from any so-called "failure," and give yourself plenty of slack if an idea doesn't work out. Who knows when or how today's failure will set up tomorrow's inspired success? Practice framing any disappointments along the way in positive terms.

Tip 16: Ask for help

If you have a spiritual tradition, access its prayerful or contemplative element. You may be surprised at how powerful and helpful this simple practice can be. Or, try asking other people for help instead. Frame your question clearly and ask someone you trust to help you.

Tip 17: Try yoga

In additional to traditional sports or workouts, I've found that a well-rounded yoga practice can bring physical exercise, diet, spiritual practices, and meditation into focus and provide a solid foundation for personal discovery. Yoga is now a mainstream activity and local classes can be found almost everywhere. If yoga doesn't appeal to you, look into other low-impact exercises with a spiritual and reflective dimension (such as tai chi). In any case, try paying attention to your breathing -- working to lengthen and deepen your breaths when possible.

Tip 18: Look to art

Any creative work or artist you feel drawn to can be great inspiration for your own creative journey, even if your path will have nothing to do with fine arts. Whether it's painting, music, writing, dance, or drama -- make exposure to creative works part of your life.

Putting It All Together

I'm the type of person who usually reads through lists of useful suggestions and never actually stops to do the exercises. But I am going to nag you gently to do better. In fairness, at one time or another I have actually done all the things in the list above.

So pull out a sheet of paper and pick one or two of the above tips to develop. Next week or tomorrow try a different tip. When you brush your teeth tonight, which hand will you use to hold the toothbrush?

Here's a worksheet that might help you (also on the CD-ROM included with this workbook -- open the "Get Going" file). It's designed to get you thinking in action steps -- coming up with concrete activities and committing to doing something. But we all know that the best intentions don't always make it to fruition. That's why the final column gives you a chance to draw a picture, describe a memory or feeling, or make any other reference that pops into your head about the task and actions you're hoping to accomplish. By tapping the creative and unconscious, you can help unblock or build resolve in support of an action that might otherwise be swept aside in the swirl of good intentions and overriding priorities. Images and poetry hooked to your goal can keep it coming back for you, against all odds.

[Worksheet] omitted for online sample chapter.

For more help in making the transition from work to retirement.

• Try one of the new online assessment tools -- they offer tests to identify your preferences and strengths, and help you use the results to find new interests. You'll also learn your favorite ways of thinking, relating to others, and dealing with common challenging situations, with an eye toward using this knowledge to seek out and be more successful in your new activities. Three paid services that offer these types of tools are:
• • MyNextPhase (www.mynextphase.com)
  • RetirementSuccessProfile (available only through a retirement coach; find one at www.retirementoptions.com), and
  • TurningPointsNavigator (sign up or find a course at http://turningpointsinc.com).
• www.retirementwellbeing.com has worksheets to help you identify your strengths and how you might apply them in retirement. The website is written by John Nelson, coauthor of What Color is Your Parachute? For Retirement: Practical Planning for Money, Health, and Happiness, by Richard Bolles and John Nelson.
• Learn about Positive Psychology and how you fit into the classic measures of happiness at www.authentichappiness.sas.upenn.edu.
• Learn how to live long enough to enjoy your reengineered life with the longevity calculator at www.eons.com.
• Take a Meyers-Briggs personality test at www.humanmetrics.com/cgi-win/JTypes2.asp.
• Find your personality type on the Enneagram of Personality by taking the free test at www.enneagraminstitute.com/dis_sample_36.asp.
• Don't Retire, REWIRE!, by Jeri Sedlar and Rick Miners, is full of strategies, case studies, and encouragement for making the transition to avocation in semi-retirement.
• A Whack on the Side of the Head, by Roger Von Oech (with great illustrations by George Willett) is a perennial favorite for boosting creativity. The title is drawn from the Zen tradition of whacking a ready and willing student on the shoulder as a way to give birth to satori -- a sudden moment of enlightenment.
• What Color Is Your Parachute?, by Richard Bolles, helps people find their way to the vocation or avocation of their dreams. It includes lots of self-assessment exercises. At some point, you may decide that finding your calling is a lot of hard work, and that maybe a whack on the side of the head is easier!
• The Artist's Way and its related workbooks, by Julia Cameron, help people find the artist within through a careful step-by-step process. She places a big emphasis on keeping a journal and doing new activities in support of personal transformation. Her approach is helpful to anyone making a life change, not just artists.

With ideas about what you'd like to do in retirement now percolating, let's turn to the next chapter, where you'll start to figure out the financial side of semi-retirement and the financial steps you can take now to semi-retire on schedule.