Many older workers are ready to slow down but don’t want to retire completely. For such folks, a phased retirement could be the ideal compromise.
Rather than stopping work altogether, a phased retirement allows you to gradually start working less or to slowly give up some job responsibilities. This can help improve your work-life balance while still allowing you to earn a paycheck.
Recently, WTW — a financial services company — released its latest annual 2024 Global Benefits Attitudes Survey of more than 10,000 workers at medium and large private-sector firms. It found that about one-third (34%) of workers aged 50 and older either have started a phased retirement or plan to do so.
Those who are now in a phased retirement are most commonly going about it by reducing the number of:
- Hours they work (cited by 61%)
- Responsibilities they have at work (41%)
A smaller number of survey respondents said they want to change either:
- To a different role or job in their industry
- Where or how they work (meaning doing more or less of their work remotely)
In a summary of the survey findings, Jonathan Sterbanz, senior director, retirement at WTW, says phased retirement can be a “win-win” for workers and employers:
“Working fewer hours even with reduced pay can help employees transition into retirement both financially and emotionally. At the same time, companies want to hang onto experienced employees and encourage them to pass on their wealth of knowledge to younger employees. Still, most employees think their employers can do a much better job of leveraging the skills of older workers.”
When workers were asked why a phased retirement is appealing, a large percentage cited financial security (76%). Nearly 8 in 10 employees — 79% — acknowledge that they should save more for retirement than they do. Just slightly over half (52%) say they are on the right track for retirement.
Other reasons workers cited for pursuing a plan of phased retirement are health (50%) and having more time for family, leisure and travel (45%).
We discuss phased retirement in a bit more detail in “6 Secrets to a Happy Retirement, According to Experts.”
