Want to cut back but not ready to retire? Popular semi-retirement plans may be the solution

After the pandemic's push toward flexible work and employee wellbeing, more organizations are embracing phased retirement plans for workers nearing the end of their careers, The Wall Street Journal reported March 15.

A survey of 1,736 human resources executives worldwide showed that while previously 17 percent of them offered semi-retirement plans, now 38 percent do. In the U.S., about 23 percent of employers offered these programs in 2021, up from 16 percent in 2016.

Phased retirement plans can be beneficial to both employees and employers. One factor driving the Great Resignation was the increase in older employees retiring, and by offering semi-retirement programs, organizations can ease the brain drain and talent shortages. The programs also give companies time to recruit and train replacements, often with the help of the retiree. 

These phased retirements also have psychological benefits for the retiree by preventing the sudden shock of stopping work, and the potential for feelings of boredom and purposelessness that can come with traditional retirement. 

While these programs present some bureaucratic challenges, like when to tap into Social Security or a 401(k) account, their increase in popularity suggests these hurdles are not too much to handle.

 

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