As financial concerns mount for older workers, the concept of phased retirement is gaining traction. For HR professionals and business leaders, understanding this trend is crucial, especially in light of new findings from the WTW Global Benefits Attitudes Survey.
Workers Planning for Retirement
According to the survey, one in three U.S. workers over the age of 50 is either already phasing into retirement or interested in doing so. Phased retirement involves gradually reducing work hours or job responsibilities as employees approach retirement.
“Phased retirement can be a win-win for both employees and employers,” said Jonathan Sterbanz, Senior Director of Retirement at WTW. For employees, it provides a smoother financial and emotional transition into retirement, while employers benefit from retaining experienced workers and facilitating knowledge transfer to younger staff, he says.
Drivers Behind Retirement Plans
The survey also highlights the primary drivers behind retirement decisions. Financial security tops the list, with 76% of respondents citing it as their main concern. Health and the desire for more personal time, such as spending time with family or traveling, are also significant factors. Notably, nearly half of workers aged 50 and older now expect to work past age 70, a sharp increase from 36% two years ago.
Given this growing interest in phased retirement, HR professionals must consider how to support this transition effectively.
Supporting Phased Retirement
Flexible work arrangements, like reduced hours or remote work options, can be vital. Additionally, mentorship programs that encourage experienced employees to train less experienced colleagues before they retire can benefit both the organization and the retiring employees.
“With employees seeking greater flexibility around their retirement decisions, employers are faced with the challenge of how to best meet their current and long-term financial needs,” said Chris West, U.S. LifeSight PEP leader at WTW.
As phased retirement becomes an increasingly popular option, HR leaders must strategically address this trend to support their employees and meet organizational goals. Understanding and leveraging phased retirement options can create a more flexible and productive workforce, benefiting both employees and employers alike.
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.