Many older workers are ready to slow down but don’t want to stop completely. For such people, phased retirement can be a good compromise.
Rather than stopping work altogether, phased retirement allows you to gradually start working less or gradually stop certain 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 Global Benefits Attitudes Survey for 2024 of more than 10,000 employees in medium and large private companies. It found that almost one-third (34%) of workers aged 50 and over have started phased retirement or are planning to do so.
Those who are now partially retired often do so by reducing the amount of:
- Working hours (cited by 61%)
- Obligations they have at work (41%)
A small number of survey respondents said they wanted to change either:
- For a different role or job in their industry
- Where and how they work (meaning doing more or less of their work remotely)
In a summary of the study’s findings, Jonathan Sterbanz, retired executive director of WTW, says phased retirement can be a “win-win” for employees and employers:
“Working fewer hours and even less pay can help workers transition to retirement financially and emotionally. At the same time, companies want to stick with experienced workers and encourage them to pass on their wealth of knowledge to younger workers. However, many workers feel that their employers could do a better job of utilizing the skills of older workers.”
When workers were asked why phased retirement was desirable, the majority cited financial security (76%). Nearly 8 in 10 workers — 79% — agree they should save more for retirement than they do. Just over half (52%) say they are on track for retirement.
Other reasons cited by employees for pursuing a phased retirement plan include health (50%) and having more time for family, leisure and travel (45%).
We discuss phased retirement in more detail in “6 Secrets to a Happy Retirement, According to the Experts.”
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