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Phased Retirement: Employee and Employer Perspectives — Fact Sheet

 

August 2014—The majority of current workers of all ages view retirement as a gradual process and regard opportunities for phased retirement as important or very important. Among older workers, many are already “partially retired” or “working in retirement”. Although employers recognize the need to mitigate potential knowledge loss as older workers retire, no more than half currently offer phased retirement to at least some employees, and relatively few report that they are considering doing so in the future. Perceived barriers include legal and regulatory concerns and rules related to modifying the distribution of pension benefits.

Facts include:

  • Among workers aged 18-64, “a strong majority (64%) of workers envision a phased transition into retirement during which they will continue working, reduce hours with more leisure time to enjoy life, or work in a different capacity that is less demanding and/or brings greater personal satisfaction. Only 22% expect to immediately stop working when they retire. Baby Boomers, Generation X, and Millennials share similar expectations,” according to the 2014 TransAmerica retirement survey.1
  • According to a 2012 Conference Board survey, “of survey respondents, 11% said they offer a phased retirement program and 30% said they rehire retirees”
  • Among steps that employers plan to take to mitigate the potential loss of knowledge as older workers retire, more than half of the employers say that they will try to keep older workers on as part-time workers or consultants (69%). Other steps include use of a knowledge transfer program to allow workers who are approaching retirement age to mentor or transfer knowledge to younger workers (53%), and they will use a succession plan for critical positions (51%). Almost half (46%) will try to entice older workers to remain as full-time employees, according to a 2011 AARP survey of over 1000 HR directors.


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