Some older workers want to retire and never punch a time clock again, opting instead to enjoy golden years full of family, travel, golf, and other activities.
But for a growing number of older employees, keeping a hand in the professional world, even after reaching retirement age, is appealing. Some of these experienced workers want or need to keep earning a bit of money, while others simply don’t want to completely let go of their jobs. For these kinds of people, phased retirement may be the right move.
Phased retirement means different things to different companies and workers, whether it’s part-time work, job sharing, or telecommuting. But in every case, flexibility is necessary in order to make this kind of transition work, and more businesses and employees seem to be showing interest in the possibilities.
Michael Mandel is one of those workers. According to a recent USA Today article, he retired after 36 years as a primary care physician, but he was soon hired back into the working world on a part-time basis, “putting in 32 hours a week and enjoying a semi-retirement that mixes a healthy allotment of golf with the rewards of a working life.”
“No way did I think I’d be working at 70 years old,” Mandel says in the article. “But the job has worked out so well.”
It’s also been a good fit for his employer, St. Mary’s Hospital of Richmond, VA. The USA Today piece says Mandel was approached about his new position “as part of an initiative by the Bon Secours Virginia Health System, the parent company of both his practice and St. Mary’s Hospital. For years, the nonprofit has asked many retiring nurses and pharmacists if they wanted to work part-time, and about a year ago it expanded the offer to workers in all occupations, says Jim Godwin, Bon Secours’ vice president of human resources.”
Such moves come as all kinds of businesses face a brain drain caused by baby boomers retiring and the labor pool shrinking. To keep good workers, or convince those who have already retired to return, companies are offering part-time schedules, remote work, and phased retirements that gradually reduce hours on the job.
“Older workers are often branded as burned out and not technically savvy, says Peter Cappelli, a management professor at the Wharton School in Philadelphia,” the USA Today article says. “In fact, he says, they have lower rates of absenteeism, less turnover, better job performance, and adapt well to new technology.”
That’s not to say phased retirement plans are completely free of complications. Some companies may shy away from them due to questions about how to handle an employee’s benefits, while workers may not like a formal plan that forces them to specify a retirement date.
According to a CNBC article, informal arrangements that allow for a gradual transition to retirement are still more common than formal plans. Whether a company offers something formal often depends on the industry, and healthcare is one sector that is more likely to offer formal plans. For example, Bon Secours changed several of its benefits to appeal to older workers, the article says.
“The company changed how its pension plan calculates payouts,” the CNBC piece says. “It based benefits on the five highest-paying years of service instead of the last five years of service. That move allowed people who reduced their work schedule retain their top pension benefit. It also extended health coverage to part-time employees and allowed employees to use day-care centers for their grandchildren.”
For companies that don’t want to formalize phased retirement, a solid flexwork plan can create some of the same opportunities, according to an article from the Washington Post. Jacquelyn James, co-director of the Center on Aging & Work at Boston College, says in the article that this allows people to be a little fuzzier about their retirement plans.
“‘The phased retirement has a lot of complications to it,’ she said. ‘It means you are signaling to the organization that you’re retiring,’ even years out, when more promotions or big assignments could be in store,” the article says. “Another issue with more formal programs, she said, is that they often require employees to set a date when they plan to retire—a decision that could change over time.
“Still, she points out that people who work for bosses who frown upon flexible work arrangements more broadly could have a tougher time. ‘The downside will be if the organization has policies on the books but doesn’t really support them,’ she said. ‘If you know the manager thinks that’s a whole bunch of gobbledygook from HR,’ employees might not ask for them. ‘Supervisor support for these programs and policies is essential.'”
If you have the support you need and are considering pursuing phased retirement, ponder both your financial realities and your psychological connection to work. For example, if you don’t have enough money saved for retirement, you may want to continue working full-time for as long as possible.
“Phased retirement is not for everyone,” the CNBC article notes. “Winding down work has a psychological effect that may cause people to lose motivation on the job. People who downshift don’t ‘fully anticipate the knock to their psyche and how phased retirement changes how they measure themselves at work,’ said Chris McMahon, a Pittsburgh financial advisor.”
No matter what companies or individuals choose to do regarding phased retirement, it’s clear that flexwork should be a key component of any strategy to maintain a strong and productive workforce. The bonus for businesses that build flexibility into their culture is that it helps all employees, regardless of their ages or stages of life.
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