The number of people working later in life is on the rise — whether for financial reasons or the desire to stay active. Some soon-to-be retirees honestly love their job and co-workers so much that they don’t want to leave. However, the thought of working less than full-time becomes more and more appealing as we move closer to retirement.
Studies indicate that many older workers plan on working beyond the traditional retirement age. The challenge for employers is having too many older workers, which can cause a bottleneck for the advancement opportunities of younger employees. These companies need both experienced and younger workers to ensure their business is well prepared for the future.
Phased retirement is proving to be a promising compromise. This is when employers let their older workers adjust to working part-time by either working a shorter day or shaving a day or two off their work week. This helps provide workers with a gradual transition into retirement life, and lets them have a sneak peak of how their life will be with less income. It also benefits companies by providing opportunities for younger employees to be mentored by the more-experienced.
The ability to reduce hours is not without some potential issues. Consideration needs to be given to pension plans, healthcare restrictions, profit-sharing incentives, social security, and spousal and death benefits. It is important to know how these items will be impacted if you decide to cut down on your hours. This will help you determine if phased retirement is a good option for you.
What do you think of Phased Retirement? Please share your comments with us.