Looking to Benchmark Pay?
Option 6: Phased Retirement
Another option your organization might want to consider is phased retirement.
Phased retirement refers to any number of plans that let employees reduce job responsibility and/or working hours to move slowly into full retirement.
A 2020 Harris Poll, conducted for the Transamerica Retirement Survey of Workers, found that 45% of U.S. workers envision a phased retirement where they reduce their work hours as they transition to full retirement.
America's retirees may create their own version of phased retirement. They may retire from their primary place of employment only to pursue work in another, often more meaningful, area of employment.
Let's take a look:
Lucy works for Company A and wants to retire at the age of 65. But Lucy isn't ready to hang up her working hat. She'll take her pension from Company A, but she'll pursue a new career at Company Z.
Phased retirement might be attractive to America's future retirees, but there are obstacles:
- 401(k) plans can't make distributions to full-time employees who haven't reached the age of 59½.
- Employees may not make enough money to support their lifestyles.
- Employers still rarely approve phased retirement arrangements.
Memory Jogger
Phased retirement refers to any number of plans that let employees: