The concept of a "traditional" retirement age is increasingly being seen as outdated, particularly by baby boomers and Gen Xers who favor a more gradual transition out of the workforce, allowing them greater control over their departure. According to the 2024 Global Benefits Attitudes Survey conducted by WTW, a substantial number of U.S. workers over 50 prefer phased retirement. One-third wish to gradually ease out of their careers, with 15% already reducing hours or responsibilities and an additional 19% planning to do so. This trend reflects a broader desire for flexibility in how people approach work and retirement as workplaces evolve. For example, a survey by Fidelity Investments revealed that two-thirds of respondents favor a gradual retirement process.
Phased retirement options enable employees to step back from some duties or transition to a less demanding role within their company. This allows them to maintain an income and workplace connections, albeit often with a corresponding reduction in pay. Employers benefit by retaining experienced staff at a lower cost and ensuring smoother knowledge transfer to younger employees, thus fostering loyalty.
Retirement experiences in the U.S. are diverse: some individuals retire completely at 65, others can't fully retire, and some aim to save enough to quit early. However, for those wanting a more relaxed work pace without leaving their jobs entirely, phased retirement is attractive. Financial security and health are key reasons for choosing this path, and it aligns with a growing expectation—46% of workers over 50 now expect to work past 70.
Phased retirements also aid financial and emotional adjustment, helping retirees find purpose and maintain social connections. Encouragingly, Principal Financial Group’s latest Financial Well-Being Index indicates that 61% of companies, particularly large ones, have some experience with phased retirements, although only 16% regularly implement them. Chris Littlefield from Principal emphasizes the importance of companies developing intentional offboarding strategies to accommodate these shifts away from traditional retirement norms.