Once you are in the second half of your career, the prospect of retirement becomes one to think about and plan for. Most of us have a long list of things to do once we have more hours in the day, but retirement is a major life change which can come as a shock if you jump straight in.
Working is about far more than money. It gives direction, meaning and purpose to our lives and days, and without it, many people feel a real sense of grief, whether they were ready to retire or not.
To avoid the psychological and financial shock of retirement, a growing solution is phased-in retirement, where older workers gradually reduce their working hours before their retirement date, instead of an abrupt cut off. The objective is to allow the individual to slowly adjust to new patterns of working and living, thereby reducing the post-retirement stress.
Studies show some 63 percent of workers between ages 50 and 70 say they would like to work part-time before full retirement. While phased-in retirement is a desirable concept, it is still a new one, and one which requires great communication and a bit of creativity between companies and their employees.
The benefits for companies include using phased-in retirement as a way to transfer knowledge from experienced workers to younger ones, in a mentor scheme. This prevents “brain drain” and the loss of institutional knowledge that might occur and it can happen over a mutually agreed period.
A 2011 AARP survey of more than 1,000 human resource directors found that more half of the employers will try to keep older workers on as part-time empoyees or consultants. Other steps include use of a knowledge transfer program to allow workers who are approaching retirement age to mentor or transfer knowledge to younger workers (53%), and using a succession plan for critical positions (51%). Almost half (46%) will try to entice older workers to remain as full-time employees.
Another study of baby boomers found that 65% plan to work past age 65 (or do not plan to retire) and only 21% expect to immediately stop working when they retire. However, only 26% these people have made a plan to achieve their wishes. An HR advisor suggests doing the following, so that older workers retain some control over their retirement process, whether they hope it will be gradual or immediate.
- Be prepared for the unexpected – illness and injury happens, and sometimes the decision is taken out of your hands, so do your homework — and plan for several eventualities.
- Keep your job skills up to date and relevant and work hard when you are there, be it part time or full time. If needed, seek additional training, take continuing education classes, or go back to school.
- Discuss the feasibility of phased-in retirement with your current employer — even if they haven’t considered it before, you have a much better chance at negotiating a “yes” to your transition plans if you’re a consistently excellent performer.