Planning for Retirement: Transition in Stages

It’s never too early to think about how you’ll one day transition out and retire.

Leaving the workplace for good can be a shock, regardless of whether you’re looking forward to it or not. Many people spend years planning for retirement and looking forward to the day when it arrives. But for others who really enjoy being in the workplace, the idea of retiring isn’t necessarily a happy one. A compromise that helps both types of people gradually move into the next part of life is called “Phased Retirement.” It hasn’t caught on universally, but the pluses benefit so many different people that one day it might. Retirement Usually Holds Surprises No matter how adequately you’ve prepared, the day when you no longer leave the house and go to work will undoubtedly bring a few surprises. Part of that comes from not really knowing what to do with all of that extra time, even if you’ve made lots of plans. And part of the surprise comes from the reality of less income. Phased retirement lets you slowly and gradually work less over the course of a year, or possibly more. No one can prepare for everything. Even if you have all of your finances in order and won’t miss the income from working, retirement will bring about changes. And there’s no way to know what those changes will feel like until you get there. When you step into retirement slowly, you can acclimate to your new schedule and new surroundings with less of a jolt to the system.

Phased retirement makes the process easier for everyone involved.

Keeping a Presence at Work Helps Everyone Phased retirement doesn’t just help you slowly get used to the idea of not working. Employers and new employees also benefit from your experience if you stick around for a while to share your wealth of knowledge. There’s no sudden drop off for you, and less of a learning curve for the next generation. The U.S. Government has hopped on board with phased retirement, according to AARP, because within three years nearly a third of its agency employees will be of retirement age. The choice was pretty clear. Workers could retire and take everything they know with them, or they could gradually step back while mentoring the next generation and easing themselves out of the picture.

Some companies may craft phased retirement plans based on how badly they need your skills and knowledge.

Not Every Employer Offers Phased Retirement Although the federal government could be a role model to businesses everywhere, the truth is that most companies haven’t adopted a universal phased retirement option. Even within the government, it’s still a choice. Some agencies may participate, and some may not. The Society for Human Resource Management explains that similar non-government programs have fallen off in popularity recently. But the solution might be to allow employers and employees to pick and choose instead of using a broad stroke to write everyone’s phased retirement plan. That way, plans can be tailored to fit the company and the individual. Even under the best of circumstances, retirement poses some challenges for everyone. Employers lose seasoned workers, and new hires face learning the job and making new connections. And as the retiree, your adjustments have only just begun. But you are also uniquely positioned to help everyone involved. By staying active, just to a lesser degree, your experience can help make everyone affected by you transition fare better. And as you gradually move to a lighter and lighter workload, the day when you wake and have nothing else on your plate won’t be scary at all. Boldin helps people of all ages prepare for leaving the workforce one day. We offer tools and resources that can help you make good choices that last a lifetime. As a start, check out our retirement calculator to learn what you need to retire, and how to get it.