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Hoping for a Phased Retirement? You May Not Have the Option

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As today’s baby boomers enter their retirement years, a large number say they are hoping and planning for a “phased retirement.” Gone are the days when an employee hung up their tool belt or put aside the briefcase on their 65th or 66th birthday and simply called it quits. These days the plan for millions of people approaching retirement age is to keep on working part time after they retire, or shift from full time to part-time status at their present employer.

It all sounds good, and it makes a lot of sense, economically and emotionally. There’s just one problem: a large majority of U.S. employers don’t seem to have gotten the message. In spite of all the public relations spin about being “aging friendly,” most companies still refuse to let full time employers cut back their hours or shift to less stressful, less demanding work once they reach retirement age. That’s the conclusion of this new article on the aging website Next Avenue. The title of the article, written by personal finance columnist Kerry Hannon, paints a bleak picture: “Hoping for a Phased Retirement?  Don’t Count On It.”

Hannon’s article is based on findings in a just-released study by the Transamerica Center for Retirement Studies. It revealed the sobering fact that, among the 1,800 for-profit employers surveyed, fewer than one-third said they would permit employees to shift from full time work to part time work in order to facilitate a so-called phased retirement. Even fewer – barely one-quarter of respondents – said they would allow aging employees to “take on positions that are less stressful or demanding so they can glide into retirement,” writes Hannon.

“In other words,” she adds, “employees who anticipate a phased retirement by downshifting at their jobs to fewer hours per week are mostly out of luck,” according to the Transamerica survey. This paltry level of support for aging workers is even more ironic when you consider the fact that “71 percent of employers Transamerica surveyed said they believe they are ‘aging-friendly’ and said they offer opportunities, work arrangements and training and tools needed for employees of all ages to be successful.”

According to Hannon’s NextAvenue article, this survey result matches a similar study of phased retirement programs undertaken recently by the U.S. Government Accountability Office.  The GAO reported that the availability of phased retirement “has the potential to provide options that would be beneficial both to the older workers and the overall economy.” But in spite of the benefits and the desire of aging employees to keep working, “formal phased retirement programs are relatively uncommon.” The reasons for this lack of support for phased retirement seem to be fairly simple: employers are worried about disruption, regulation, and cost. “They want full-time employees at their desks and they just don’t have an appetite to manage a workforce that has a substantial number of part-time workers,” Hannon writes. “Many employers don’t want to offer a phased retirement program that they think could be subject to laws and regulations and could be expensive to administer.” And as for the costs, the biggest impediment seems to be an employer’s reluctance to keep paying for the employees’ health and retirement benefits.

But there are plenty of reasons why phased retirement plans are good for business. Those employers in the GAO study who take a more flexible approach have experienced much higher retention of knowledgeable, highly-skilled workers, and their younger workers have benefitted greatly from the transfer of knowledge from their older counterparts.  Companies are able to avoid a sudden “brain drain” when older workers retire by phasing them out more gradually, making it easier to plan for the company’s workforce needs.

The bottom line for you, if you’re counting on a phased retirement, may be to negotiate your own plan. Kerry Hannon writes that “it may be up to you to persuade your employer to let you have a phased retirement.” These more informal arrangements will probably be more common for the foreseeable future than formal phased retirement programs.  “Don’t look for a dramatic change in the availability of phased retirement programs soon, however,” Hannon warns. Even so-called “age friendly” employers are still very slow to put phased retirement plans into practice.  But if you plan to approach your boss about cutting your hours or shifting your work to accommodate a phased retirement, you’ll need to demonstrate that it’ll be worth keeping you on part-time by keeping your skills up-to-date and marketable. Keep adding to your skillset, volunteering for workplace projects, and generally making yourself indispensable.

Are you starting to get serious about planning for retirement? Or have you found yourself having to retire earlier than you planned? Wherever you are on the “retirement spectrum,” we at AgingOptions want to offer some reassuring words: it is definitely possible to create a retirement plan that will allow you to protect your assets as you age, keep you from becoming a burden to your loved ones, and prevent your being forced against your will into institutional care. You can take charge of your retirement and not be at the mercy of an employer, or even Uncle Sam! We call our approach to retirement planning “LifePlanning,” because an AgingOptions LifePlan governs all the critical facets of retirement life: finances, medical, housing, legal, even family. All these must work together harmoniously to ensure that you’ll enjoy the type of secure retirement you’ve always dreamt of – and with an AgingOptions LifePlan in place, you will.

We invite you to invest just a few hours and find out more by attending a free LifePlanning Seminar soon. We offer these popular seminars throughout the area, so to register for the site and date nearest you, simply click here for our Upcoming Events page, or call us during the week. No matter what your retirement dreams, we can help you bring them to fruition with the power of an AgingOptions LifePlan.

(originally reported at

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