Phased Retirement
Categories: Retirement
Retirement. For some, it’s the pot of gold and the end of the rainbow. For others, like our Aunt Carol, it’s the stuff of nightmares. All that sitting around with nothing to do and nowhere to go…it makes her shudder just thinking about it. But on the other hand, she’s been working in the HR department of her organization for over 30 years now, and the long hours and stressful job environment don’t thrill her quite as much as they used to. Luckily, her company offers something called phased retirement. “Phased retirement” is for folks like Aunt Carol who are maybe nearing retirement age, but don’t necessarily want to 100% retire.
Phased retirement looks different in different organizations, but the goal is to provide a transition from full-time employment to full-time retirement that benefits both the employee and the company. For example, maybe Aunt Carol’s company offers to cut her back to three days a week until she retires for real. Or maybe they offer to let her work from home one or two days a week. Maybe they offer to transfer her to a different job or department that isn’t as stressful or time-consuming as her current one. Maybe they assign her a special project or initiative as a last hurrah. Or maybe—and this is becoming a more popular option—they ask her to work with their training department to find ways to pass along her knowledge and wisdom to the next generation of employees. Sounds amazing, doesn’t it? What a great way to bid the daily grind adieu.
But phased retirement isn’t all roses and glitter and happiness. There are potential drawbacks as well. If Aunt Carol’s phased retirement plan includes a reduction in hours, she could also see a reduction in salary, which is never fun. And on the business side, it can be expensive to keep paying for employee benefits for people who maybe aren’t contributing as much as they used to. But it can be a great way for companies to capitalize on the knowledge of their employees before they retire, which is why more and more organizations are looking for ways to incorporate phased retirement plans.
