Why Workers Are Choosing a Different Kind of Retirement

The nature of work is shifting. And in a world of digital nomads, frequent job hopping, and the gig economy, retirement is changing, too.

A poll of 10,000 employees from consulting firm WTW (WTW) found that a third of Americans over the age of 50 want a “phased retirement,” which involves gradually phasing out responsibilities or work hours over time, instead of making a sudden transition to retirement.

Slow Exit

The vast majority of workers (76%) who said they wanted a phased retirement are motivated by financial security. As workers age, they still want an income stream, but don’t want the strain and pressure of working 40 hours a week. Some older workers like the sense of purpose that work gives them. Other reasons people are pursuing phased retirement include their health (50%) and having more time for family and travel (45%). Employers can benefit as well by keeping experienced talent in the fold at a reduced salary.

Do Your Homework

Before going the phased retirement route, study the tax and Social Security implications of this decision.

For workers who are motivated to remain on the job because they fear their retirement savings are too thin to support them, there are many ways to boost your retirement savings, even close to retirement. Nearly eight in 10 workers said they aren’t saving as much cash as they need for retirement.

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