Author: Christy Bieber

Making the decision to retire is a big deal, and signifies a major lifestyle change is coming. Let’s say you’re just four months away from your planned retirement, odds are you’ve been gearing up for this next stage and getting everything in order to enjoy your life of leisure for a while now.

You’ve got a decent nest egg and you’re ready to really hone your golf game. What happens, though, if a perfect job comes along in this situation?

Let’s say you’re offered a position that’s five minutes from your house, with good benefits, no workplace drama or stress and a good friend who works at the same company and says it’s great.

Oh, and let’s say that the job provides just half of your current pay — but the pay is pretty close to what your retirement income would be.

Should you stick with your plan for retiring in this situation or should you take the lower-paying job that allows you to get out of your current work environment sooner, keep insurance coverage for you and your spouse and delay collecting your retirement benefits to make your money last longer?

Here’s what you should consider as you make this decision.

How will taking the new job impact your retirement savings?

When you take a big pay cut, obviously you’re not going to be able to save as much for retirement as you would at your current job. However, with only four months left to go until you stop working, chances are good that you weren’t going to be adding much to your nest egg anyway.

In fact, by delaying when you start drawing from your retirement accounts, you can end up in a much better place financially.

Your money can stay invested and keep benefitting from compound growth instead of you beginning to make costly withdrawals. You can also delay claiming CPP and keep increasing your monthly benefit until as late as 70 years old, which could more than double. Instead of receiving $800 per month at 60, you will receive $1,775 at 70. That’s a big increase, on top of the fact you’ll also be growing your invested funds.

How much income do you need to live on?

You’ll also need to consider how much income you need to live the lifestyle you’d like to live in retirement. While your new job may provide an income similar to what you’ll earn in retirement, continuing to work rather than being at home can come with added costs.

You may have more commuting expenses, for example, although that should be negligible with the office just five minutes from your house. However, you may also be more likely to buy lunch at work or need costlier work clothing, which can mean you need a little more money.

At the same time, keep in mind that working longer will likely increase the income you eventually have as a retiree. If you have more of a cushion to live on in your later years because you take this new job, you may be better off — especially given uncertainty around the nation’s economic prospects in the near future.

Would retirement make you happier than working?

Your happiness matters when it comes to retirement decisions. If you have been looking forward to retirement and don’t want to spend more years working, then you should likely not put off quitting even if the perfect job comes along. Especially if you already have enough money to retire.

And with 30% of retirees being at risk of becoming socially isolated, it may be prudent to take a new job if it will help you maintain social connections. You can always work on your golf game on the weekends.

You should carefully consider all of these issues as you decide what’s right for you. An unexpected change in circumstances can be shocking when you had plans in place, but it may just end up being a blessing that makes your future retirement a much more enjoyable one.

Sources

1. Government of Canada: Deciding when to start your public pensions

This article I’m 63 years old, have $800K in savings and I was all set to retire in four months — but now I’ve just got a fantastic new job offer. Should I take it or stick to my plan? originally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Retirement is supposed to be a happy time. We speak of the "golden years" for a reason.

For many, however, the last phase of life can be the most painful and unhappy.

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Almost a third of retirees suffer from depression. That number is too high.

The good news is, though, you don’t have to be broke and miserable in your later years. If you simply stop doing five common things after age 55, you can increase the chances that you have a happier, richer retirement that you actually enjoy.

1. Neglecting Your Health

Giving up unhealthy habits can make all the difference in your longevity and continued ability to do the things you enjoy. That’s why it’s crucial to stop compromising your health as you age.

Exercising reduces your risk of all sorts of diseases and increases the chance of a long, healthy life. In fact, older adults who did any weight lifting, but no moderate to vigorous aerobic activity, were 9% to 22% less likely to die over a decade, according to a 2022 study cited in an AARP article. "Those who met aerobic guidelines and lifted weights once or twice a week had a 41 percent to 47 percent lower risk," it added.

It’s also worth giving up other unhealthy habits, from smoking to eating poorly to getting too little sleep. Changing these behaviors can not only enable you to enjoy retirement for longer but it also makes it more likely you’ll be healthy enough to do the things you love once you leave work.

2. Supporting Adult Children

Adult children can be a huge source of joy for retirees, but they can also be a major financial drain. As many as 47% of parents with grown, non-disabled children provide their kids with some kind of financial support, with parents providing an average of $1,384 monthly, according to research from Savings.com.

These contributions to kids are more than double what the average working parent contributes to their own retirement savings monthly, which is why it’s not surprising that 58% of parents said they’ve sacrificed their own financial security for the sake of their adult kids.

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While it’s understandable to want to help your kids, it’s also important to remember that they have time to build their financial futures but you don’t. Set a limit on how much you help based on what you can truly afford and look for ways to offer non-financial assistance.

Doing so is the only smart choice for both you and your kids because if you end up broke, it won’t be good for them either when you show up to live in their guest room.

3. Taking Time for Granted

It’s an inevitable fact that the older you get, the less time you have left. That’s why it’s so essential to stop wasting time in your later years.

Once you reach your mid-50s, you don’t have endless years left to save. Get serious, making the sacrifices needed to build a big nest egg. Whether that means putting in extra hours, asking for a salary bump, or making budget cuts, step up your savings efforts now more than ever.

Devoting your efforts to bulking up your savings in your 50s will hopefully pay off and, as you move into your 60s, you’ll get to a point where trading time for more money no longer makes sense. At this point, if you have enough to live comfortably, staying on the job longer to earn more often stops being worth it if you give up some of what may be your last healthy years.

The early use of your time saving should allow you to put your time to good use enjoying life later — so make the most of each of these different life phases.

4. Not Spending in Line With Your Values and Goals

For seniors living on a fixed income, wisely spending money is more important than ever. Unfortunately, if you don’t have a plan for what to do with your dollars, you could end up spending on the wrong stuff.

If your dream is traveling, for example, but you’re staying in your costly family home and spending your travel money on property taxes and home maintenance, you’d likely be far better off downsizing and freeing up cash to take your dream trips.

Take the time to look at exactly where your money is going, and make sure that you’re using it the way you’d prefer. Cut the things you don’t care about and allocate as much of your money as possible to making your retirement dreams a reality.

5. Worrying Too Much

Finally, far too many seniors end up wasting their retirement worrying about the things they can’t change. From bad news on TV to a potential future market crash to undesirable political outcomes, there’s a lot that seniors spend their days fretting about — very little of which is in their control.

Rather than wasting time stressing, seniors should take the steps they need to set themselves up for success, like choosing the right asset allocation for their investments and making sure they have a life where they live below their means at a safe withdrawal rate.

Seniors who are smart about their finances and who maintain an objective distance between themselves and upsetting issues are likely to be a whole lot happier — which is what they deserve in retirement after a lifetime of working to get there.

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Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Ready-made housing is not a new phenomenon, but a Bay Area resident caused excitement in his Samara neighborhood in May when his new Accessory Dwelling Unit (ADU) arrived on a flatbed truck, and was installed via crane in only eight minutes.

The proud new ADU owner, who identified himself as Owen, spoke to CBS affiliate KPIX about the process, as a crane lifted the ADU over his house to gently place it in his backyard.

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Delivered within six months of Owen’s ordering it, the house arrived fully finished on the back of a semi-trailer truck with nothing to do but place it on its foundation.

Neighbors came out to watch, taking pictures and video as the crane swung the house over his existing home and onto its waiting foundation.

Owen said they described it as "one of the most exciting things that’s happened on the street."

While a spectacle like this isn’t something you see every day, ADUs are increasingly popular. Not everyone is happy about it.

A fast, affordable way to add an extra home

ADUs are simple, small housing units located behind or in the yard of pre-existing homes. They’re usually 400 to 1,200 square feet. A pre-fabricated ADU can be a faster and more affordable solution than building a home onsite from scratch.

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Owen paid $300,000 for his one-bedroom, one-bath unit, including $170,000 for the unit itself plus transportation and installation costs. Now he has a place for his parents and in-laws to stay when they visit.

"They like to come visit and stay with us for a couple of months every once in a while to spend more time with their grandkids,” he said. “We thought having this dedicated space that’s detached from the main house would make everyone more comfortable."

ADUs can also be used as home offices or rented out as income properties if zoning allows.

Critics say the units detract from neighborhood character, reduce available parking, depress property values and strain neighborhood amenities. And it’s not always as smooth a process as Owen experiencied.

More states are allowing ADUs

Jeremy Pearman, a spokesman for Samara, the company that built Owen’s home, said they were able to get a permit for the ADU submitted and issued in seven days thanks to California’s streamlined ADU approval process..

As HousingWire explained, California is among a number of states fast-tracking ADU approvals, along with Colorado, Ohio, Arizona, Massachusetts and Hawaii.

Governments are greenlighting ADUs in response to the nationwide need for affordable housing and buyers’ demand for smaller homes “closer to where the urban action is."

Some states are ending a ban on owner/occupancy requirements, allowing ADUs to be sold separately from main residences. This makes it easier to build ADUs on multi-family properties.

They’re requiring utilities to post connection information for services for ADUs, and require cities to develop programs to streamline ADU approval.

Is an ADU right for you?

If you are considering an ADU, it’s important to think about the big picture to ensure this type of housing unit is right for you. The Colorado architecture firm F9 has some helpful guidelines.

Before starting construction, make sure you understand:

Zoning and permitting requirements. You may want to talk to a local architect that understands ADU regulations. You will want to contact your local planning department about the project to see what’s entailed in terms of zoning.

Design and layout considerations. In a smaller dwelling, every inch counts. Whether it’s going to be used for family, as a home office or as a rental income property, make sure you get an ADU that’s a good fit for your needs. Designing a multi-generational, accessible space is a good way to future-proof your purchase.

Time and cost involved to get hooked up to utilities. Find out whether your existing home can supply a secondary unit with electricity, heating and air conditioning and indoor plumbing or if you’ll need separate services.

Local rules on renting out the ADU. Not all jurisdictions will allow this.

Budget and cost. An ADU can cost anywhere from $300-$800 per square foot. Make sure you budget accordingly and put away at least another 20% to account for overages and challenges in the construction process. Also consider how an ADU will affect your property taxes and insurance in the long term.

Lastly, if you plan to install a portable ADU like Owen that’s going to be craned in, don’t forget to alert your neighbors so they can come out and watch the show as it’s being delivered.

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Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Imagine working day-in day-out, dutifully contributing money to a 401(k) for years — and then losing track of the money when you leave your job. Mortifying, but also extremely common.

In fact, in 2023, Capitalize estimated 29.2 million 401(k) accounts were lost or forgotten across America, containing $1.65 trillion in assets.

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Some people who forget old 401(k) accounts never remember they exist. But what if you do remember the account — but you can’t remember which plan administrator holds the funds, and the company you used to work for won’t help you?

Your money, your rights

Contributions you personally make to your 401(k) are 100% vested. This means the money you put into the account and any growth from investments is yours to keep right away. So, your company can’t withhold your old account from you, even if none of the company’s contributions are vested yet.

You should be persistent in contacting them to find out where the account is. Start by reaching out to HR, but if that doesn’t work, contact your former manager or even the CEO to get answers. Be polite but firm and insist they provide you with information about your old plan.

Plan sponsors are “obligated” to stay connected with former ex-employee participants, according to the Society for Human Resource Management.

But if the company is no longer operational, or if the people working there now can’t or won’t answer, then you have other options, including:

• Reaching out to old coworkers to see if they know who your plan administrator was
• Searching through old emails or financial records for statements or account notifications, as most plans send these quarterly or annually
• Reviewing your old pay stubs for information about 401(k) deductions

If none of these efforts work, online databases can help you track down the account. For example, while not all companies participate, some businesses register unclaimed 401(k) plans with The National Registry of Unclaimed Retirement Benefits. You can input your Social Security number into the registry to see if your company has your 401(k) listed.

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Alternatively, if your company terminated your old plan, or is in the process of doing so, then you may be able to find it in the Department of Labor’s abandoned plan database. Some private sites like Beagle or Capitalize can also try to help you.

Keep trying these options until you ultimately identify where your 401(k) plan is. Then, contact the plan administrators to confirm they are holding the account and make a plan for what to do with the money.

How to avoid losing your old 401(k)

As you can see, tracking down an old 401(k) can be a hassle. Thankfully, you have better options than just leaving your 401(k) behind when you leave a job.

One solution is to roll the money over into your new company’s 401(k). The biggest benefit of this option is that you can keep all your workplace retirement money in one place. Doing that can make it easier to ensure you have the right mix of assets since you can easily see your overall allocation within one account.

However, you also have another option, which many people prefer. You can roll the money into a traditional IRA.

You’ll need to either do a direct rollover so the money moves right from your 401(k) to your IRA, or if your 401(k) company sends the money right to you, you will need to deposit it into the IRA within 60 days to avoid early withdrawal penalties. If you do that, there are no tax consequences to the move.

Moving your money into an IRA gives you more freedom and flexibility since you can pick your brokerage firm and can choose a broker that allows you to invest in almost anything you want. You also won’t have to keep moving 401(k) money around every time you leave a job, since all the funds you rolled over can just stay in the IRA.

Whichever account you decide to roll the money into, if you move it with you, then you won’t have to worry about trying to contact old employers to find out where your funds are. You’ll have the money safe and accessible to you to help you build the secure retirement you deserve.

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• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Faced with the rising cost of living, many American retirees are looking to control one of the most fundamental expenses: housing.

Since the pandemic, the cost of housing has remained stubbornly high. According to a recent report, home affordability slipped further in January, as rising prices raised the income needed for a mortgage in 12 of 13 major markets.

Moving is not easy at the best of times, but for retirees, deciding whether to rent or own their home will have a long-term impact on their finances and their lifestyle. To help clarify whether renting or owning is your best option, retirement author and YouTube host Geoff Schmidt advises following what he calls the 5x5x5 rule.

About the 5x5x5 formula

The 5x5x5 rule is a way to gain clarity on your decision to move by breaking down the pros and cons of renting versus owning both short- and long-term. Most importantly, retirees need to consider where they’ll be — not just geographically speaking — 10 years down the road. Here’s a breakdown of each of ‘five’ in the 5x5x5 rule.

5 pros of ownership

The first step in deciding if you want to buy a new home as a retiree is to think about the five big perks of having your own property. For retirees, the pros of owning a home allow you to:

1. Build equity in your home: Each mortgage payment you make brings you closer to owning your house free and clear with no payments. If you can buy a new home or condo outright by selling your current home, you can still build equity in your new dwelling over time.
2. Predictability: If you have a fixed-rate mortgage, your mortgage payments will remain consistent for years and you don’t have to worry about a landlord ever making you move.
3. Tax benefits: While mortgage interest and property taxes are not tax-deductible on a principle residence, you could find tax deductions if you use a portion of your home for a home-based business or to rent out as short-term accommodation or to a long-term tenant.
4. Customization: You don’t need a landlord’s permission to alter and improve your home.
5. Home appreciation: Homes generally increase in value, so you can increase your net worth by owning a property.

5 pros of renting

Renting also has five significant upsides, particularly for retirees who want greater freedom to travel and to make bigger moves — potentially across the country or even abroad. These include:

1. Extreme flexibility: You can leave your property after giving notice and go wherever you want much more easily than with an illiquid home you’d have to sell first.
2. Lower upfront costs: You only have to pay first and last month’s rent and a security deposit to move into a rental, not make a large home down payment.
3. No maintenance concerns: If something breaks, your landlord is responsible for the cost of fixing it and the actual repairs. You don’t have to build up an emergency fund for maintenance.
4. Predictable expenses: For the duration of your lease, your monthly housing costs including utilities will remain consistent, even if the cost of energy goes up, for example.
5. Lack of worry: If you’re in a rental apartment, you won’t have to concern yourself with shovelling snow, mowing grass or other matters of general, external upkeep.

5 variables that help you make the decision whether to rent or buy

The last step in the 5x5x5 rule is to consider specific variables that affect you. These include:

• Financial stability: Considering your current and future Canada Pension Plan (CPP) benefits and retirement income, will renting be more affordable long term, or will owning be more beneficial?
• Lifestyle preferences: Think about quality of life and what matters to you. Maybe your biggest priority is to be close to family. Perhaps you want easy access to amenities like health care and recreation. Do you want more predictability or more flexibility? Which option — buying or renting — comes closest to matching your desires?
• Current and future health: Are you in a position to maintain your home and does it have aging-in-place options?
• Estate planning: Do you want to have a home to leave as an asset to your loved ones?
• Market conditions: Is it a good time to buy a property? What do you think will be happening in the real estate market in the next decade?

By asking yourself these detailed questions about your own personal financial goals and lifestyle preferences, it will be easier to decide whether to own or rent now and in the long term.

This article Should Canadian retirees own or rent their home? Use this simple ‘5x5x5 rule’ to figure it out originally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

San Diego residents in their golden years should be enjoying the balmy weather and beaches, but instead, many are worrying about how to recover lost funds or survive financially after being scammed.

Victims include retired professionals, says Michael Rod, an FBI supervisory agent in San Diego Count. Two such victims whom reported over $2 million stolen in the past two weeks.

“Doctors, lawyers, judges, pilots, engineers, all have fallen victim to this stuff, like very smart, intelligent people,” Rod told ABC 10 News San Diego.

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That’s why scams are often underreported.

The FBI reports that last year, at least 1,300 San Diego residents aged 60 and older lost an average $80,000 each to fraudsters — a total $108 million, but that’s just the tip of the iceberg. Many victims are embarrassed and don’t report when they’ve been targeted.

Rod now leads a new initiative dedicated to helping protect older residents in San Diego County from such scams: the San Diego Elder Justice Task Force. The task force is made up of local law enforcement agencies, the FBI, the District Attorney’s Office and Adult Protective Services.

"It’s a first-of-the-kind model,” explained Rod, who is currently serving as task force commander.

It’s urgent work as elder fraud is on the rise nationwide — $4.8 billion in losses last year, according to the FBI. Residents of California, Florida, and Texas lost the most money, according to the FBI.

Not only is more money being stolen, but criminals are getting more brazen.

Scammers get bold, as criminals send couriers to pick up money

As ABC 10 News reports, one audacious scam is occurring almost daily in San Diego, as overseas criminals ensnare innocent victims in a tech support or overpayment scam, and then send a courier to their house to pick up cash.

Dale Marsh, a Carlsbad resident, was nearly a victim of this very crime after receiving a text from a phone number thanking him for purchasing Norton antivirus products.

He called the number to explain he hadn’t made the purchase, and spoke to a “very polished, very professional, very non-threatening, very corporate, business-like” rep named Roger who told Marsh he’d have to enter $500 into an online form to have funds sent back to his bank account.

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Marsh followed the instructions but then “Roger” claimed he had "accidentally" transferred $50,000 to Marsh’s account and that he would lose his job unless he sent a courier to Marsh to collect the $50,000 back immediately.

Fortunately, Marsh’s wife heard this all from another room and called the police, so when the courier showed up in a Dodgers hat, he was greeted with a fake $50,000 as well as an arrest.

Ultimately, four people ended up arrested out of that sting operation, and the FBI is investigating a border transnational crime ring involved with orchestrating the scam.

“Oftentimes we see that these couriers are coming from the greater L.A. area,” Nicole Mondello, an FBI official, said.

While criminals who work overseas generally initiate the scams, the couriers are paid a small fee of around $1,000 to go to seniors’ homes and collect the funds.

How seniors can avoid falling victim to a scam

Rod’s task force has already been a great success, with agents recovering $7.5 million to return to victims. And he thinks it could be a model for other areas as well.

"Once we had centralized reporting by all of our local law enforcement agencies, we realized the extent of the problem," he said.

But while new initiatives like the task force help address the larger issue of elder fraud, it’s important for individuals to protect themselves as well. Here are some tips from the FBI:

• Never answer calls or texts from unfamiliar numbers.
• Look up telephone numbers independently to call back a "business" or "government agency" that contacts them without solicitation
• Never hand over cash, wiring money, or sending cryptocurrency to someone you do not know
• Talk to a friend, family member, or other trusted person before giving any stranger money or personal information.

It’s also important to remember that scammers use fear and time pressure to get people to act quickly. “I was a little scared, a little fearful, thinking, here’s a $50,000.00 wire transfer," Marsh said.

Rod warned, "they’re going to put a timeline on something and say you have to act by this time and generally, it’s not enough time to think something through."

If you’re being pressured to provide money, just say no so you can avoid becoming one of the thousands who loses billions due to brazen scammers who breach your trust.

What to read next

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• Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

A 92-year-old man from Sun City Center, Florida, is out $800,000 after getting caught up in a romance and bank scam allegedly coordinated by a 37-year-old man who is now behind bars.

"This was an individual who was lonely," Amanda Granit, a spokesperson for the Hillsborough County Sheriff’s Office, said of the victim to Fox 13 Tampa Bay in a story published May 2. "[He] didn’t have family or friends in the area. He was in a facility, and he was looking for connection. And unfortunately, he found it in the wrong place."

Otiz Swinton Jr. was arrested in Orlando on April 30 and has been charged with multiple counts of fraud. This isn’t the first time he’s been linked to a criminal case involving seniors.

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Here’s what happened, and what you can do to avoid becoming a victim of a romance scam.

Senior citizens targeted

Swinton Jr. was already serving a prison sentence when he initiated contact with his victim, police say.

"Seven years ago, he was convicted of stealing more than $1 million from more than 50 people in Sun City Center," Granit said.

According to Fox 13, police say that offense involved the scammer telling seniors they had fraudulent charges on their credit cards and needed to mail the cards to him to resolve the problem.

In this latest incident, police say the victim transferred money from his Fidelity account into his Wells Fargo account. The funds were allegedly withdrawn to multiple individuals via a cryptocurrency platform, peer-to-peer transactions, ATM withdrawals and other methods.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

From March 13 to April 2, five counterfeit checks were allegedly made payable to Swinton Jr. from the victim’s bank account, totaling $14,300, while over $5,000 in charges were made on the victim’s card. Fox 13 reports the suspect had just been released from jail at the time.

Police say the victim was targeted as early as June 2022.

How to protect against romance scams

Romance scams are incredibly common. As of March 31, the Federal Trade Commission (FTC) had received 13,768 reports of romance scams in 2025, with losses totaling $280 million.

The good news is, there are ways to avoid them. The number one way to not fall victim is to simply not send money, gift cards, crypto or anything else of value to someone you haven’t met in person.

The FTC also advises those making new friends online not believe promises anyone makes about helping you make money. One should also be suspicious if a person refuses to meet, and do a reverse image search of any pictures you receive to ensure they’re legitimate. It’s a good idea as well to tell a trusted friend about your interactions so you can get their opinion about whether things are above board.

In this particular case, the victim was 92 and in an assisted living facility. Seniors living in isolation or experiencing cognitive decline can be ripe targets for scammers. That’s why it’s important for loved ones of people who are aging to stay on top of things and make sure they’re safe, and, if necessary, pursue guardianship and take over management of their assets if it appears they could be vulnerable to scammers.

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Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Unused sick leave could be your secret weapon for an easier transition into retirement.

Depending on your employer’s rules, it might boost your pension, bolster your wallet or ease you into part-time work. Around 77% of workers have access to paid sick leave, according to the Bureau of Labor Statistics. Paid vacations are available to 79% of workers, while 81% have access to paid holidays.

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If you are lucky enough to have paid sick leave, you may be able to accumulate it depending on your employer’s policies. For example, some companies — especially in the public sector — allow you to bank your sick leave rather than following a “use it or lose it” policy each year.

If that’s the case, when you eventually leave your job, you may be for a payout for your unused sick leave or receive credit for it when your pension is calculated.

For some workers, taking a payout or increasing a pension benefit makes good sense. For others, using accumulated sick leave to ease the transition into retirement may be more appealing. If you’ve banked a substantial balance, you might consider asking your boss if you can use some of it each week to shift into part-time work.

This approach allows you to gradually wind down your workload, tie up loose ends and ease into retirement while adjusting to a slower pace of life. However, not all employers allow this, and it may not be the best option for everyone. Here’s what you need to know.

How to maximize sick leave and transition into retirement

As a general rule, sick leave is meant to be used when you’re sick. Unless your company offers a blanket Paid Time Off (PTO) policy — allowing you to use your time off for any reason — you typically can’t use sick leave for vacation or retirement planning. Doing so would be considered a misuse of benefits.

If you’re working toward a specific number of service years to qualify for a pension, unpaid sick leave generally cannot be counted as extra service time. For example, if you need 30 years of service to qualify for full retirement but have 29.5 years and six months of unused sick leave, that leave won’t count toward your required service time.

However, if you have medical appointments — such as a knee or hip replacement — you might consider using your sick leave while still covered by your employer’s health insurance. This can make good sense, allowing you to preserve your early retirement days for other priorities.

It’s important to understand your company’s rules before taking extended sick leave, as misusing it could jeopardize your employment or create issues as you approach retirement. If you’re interested in part-time work as a bridge to retirement, your employer may be open to the idea — but sick leave typically won’t be the tool to make it happen unless your company is willing to bend the rules.

A better strategy is to save up PTO or vacation time, if available, and use it to reduce your work schedule. By timing vacations around weekends and holidays, you can stretch your time off and create a gradual transition into retirement.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

Bridging the gap until retirement

If you’re not quite ready to stop working, there are lots of ways to ease into retirement without relying on sick leave — and lots of ways to support yourself financially during this period.

One option is claiming Social Security while working part-time, allowing you to supplement your income while reducing your work hours. However, if you haven’t yet reached full retirement age (FRA), earning too much could temporarily reduce your Social Security benefits. These benefits will be recalculated at FRA to account for any deductions.

You might also consider consulting work or a low-stress side gig to earn extra income during your transition. Various apps and platforms make it easy to find flexible opportunities, from dog walking to rideshare driving, depending on what might be a good fit for you.

Regardless of your approach, ensure you have enough money in your retirement accounts to cover about 40% of your pre-retirement income, as Social Security typically covers the other 40%.

Creating a detailed budget and wisely earmarking every dollar will help ensure that your retirement income stretches far enough. By planning strategically, you can transition smoothly into retirement while maintaining financial stability — without relying solely on sick leave.

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• Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

When Tony Brown got a call in late November from someone named "Emily" who said they worked for a company called Moneypark Finance, he thought his prayers had been answered. According to News 5 Cleveland, Tony and his wife, Christina, had been seeking a personal loan to furnish their new home and buy Christmas gifts for their kids. Emily just happened to offer them the chance to borrow $8,000.

But the Elyria, Ohio, couple ended up walking straight into a nightmare that continues to haunt them. An investigation by the local broadcaster found no evidence that Moneypark Finance existed, and the couple had been swindled for thousands of dollars in a check scam.

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"It’s depressing because we really haven’t been able to get caught back up on everything," Christina told News 5 in a story published April 17.

Now, the couple wants to warn others. Here’s how the scam worked, along with some tips on how to avoid a similar situation.

How a scam cost the Browns thousands

The Browns say Emily told them they could borrow funds, but there was a catch. Because the couple had poor credit, she said they’d have to print the loan checks themselves, which were sent by email. The couple was instructed to buy blank check paper and print them out.

Next, the Browns say they were told to deposit the checks into their account at different Fifth Third Bank locations. Afterward, they were to buy gift cards and forward the codes on those card. The instructions left them scrambling.

"I’m getting off work and I’m running around Lorain County trying to get these checks done and deposited, and then have to turn right back around and go buy gift cards,” Christina explained.

She began to get upset, and Tony acknowledged the situation was a little odd

"When the bank accepted my first one, I was like this might be cool," he said. "I didn’t know she was going to make me do it again and again."

The couple got fed up and spoke directly with their bank. Now, Tony says, his bank account has been locked and he has to pay thousands of dollars for the fake checks.

"I’m having to work more shifts at work to be able to get caught up and [Tony is] doing a lot as well," Christina said.

"I feel like an idiot," Tony said.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

How to avoid scams and keep your funds safe

Unfortunately, banks don’t usually refund money if you are a victim of a check scam. Fake check scams take many forms, from promises of a phony loan to being hired for a fake job to being "overpaid" for something you sell.

What many have in common is that you’re given a bad check to cash and told you must buy and provide gift cards in exchange. Since banks often make deposited funds available quickly, you may think the money is safely in your account — but it’s not.

To avoid a similar scam, you should always research a company carefully before you agree to any financial transactions. In this case, News 5 tried to track down Moneypark Finance but couldn’t track down a representative after calling several numbers linked to the company. Journalists even traveled to Houston, Texas, to visit the address listed on the company’s website — but it didn’t exist. There was a hotel standing where the address would have been, with no sign of a Moneypark Finance inside.

Be wary if any business asks for anything other than a conventional means of payment.

"Anybody telling you to print checks, anybody telling you to buy gift cards … if they have a special payment method in mind, it’s probably a special case of being scammed," Ryan Lippe, Consumer Educator with the Ohio Attorney General’s Office, told News 5.

Lastly, avoid doing business with any company that pressures you to act quickly or calls you out of the blue. If you get a phone call from a company asking for money or financial information, the best thing to do is just hang up.

Scammers "want you to act fast," Lippe said. "They want you to think flat-footed. They don’t want you to be thinking with a rational mind."

What to read next

• JPMorgan sees gold soaring to $6,000/ounce — use this 1 simple IRA trick to lock in those potential shiny gains (before it’s too late)
• This is how American car dealers use the ‘4-square method’ to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs
• Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.