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Phased Retirement: Is It For You?

Posted Sep 12 2008 1:38pm

Are you one of those people who think that leaving your job/career will be like jumping off a cliff? Can't imagine not having challenging, interesting projects to work on? And not interacting with lots of people who are working toward common goals?'d really like to slow down a bit, not commute an hour to work every day all year round. Maybe take a few months off in the winter to migrate someplace warmer or nearer to grandchildren.

Phased retirement from your regular job might be just the thing for you. Since the passing of the Pension Protection Act in 2006, you are allowed to cut back hours and still draw from your pension and maintain your benefits. Of course, you won't earn as much, and maybe you won't be able to retain all the responsibility you once had, but, hey, aren't you getting ready to sleep better at night and not have to worry about all those people who are dependent on you at work?

Martha Hamilton wrote in AARP Bulletin Today (8/20/08 ) that a Hewitt study of 140 mid to large employers found that only 5% have phased retirement programs. But, 15% said they see it as being relevant 5 years from now when more boomers want to leave their jobs...the anticipated brain drain.

Employer groups who are already experiencing shortages of seasoned workers, such as universities and boards of non-profits, are more likely to offer phased retirement now. But, many corporations are not looking ahead adequately to cover their needs for the upcoming years.

Still, the motivated employee who knows what kind of projects or roles he or she could do with a flexible schedule could reasonably convince their HR and boss to consider reducing time at work. Under the PPA requirements, people can work only 24 weeks per year and still draw from their retirement benefits.

What has your experience been in asking for phased retirement from your employer?

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