A growing trend is emerging among Gen X, millennials, and Gen Z: the desire to retire by 60. This shift is not just a passing fancy—it’s becoming a non-negotiable for many in these generations. The exciting part? This approach is proving to be a win-win for both employees and employers alike.
A few years ago, a project manager at a mid-sized company in rural Kansas made an unusual request. She was contemplating early retirement but didn’t want to leave abruptly. Instead, she asked if she could gradually reduce her hours over time. Initially, the company’s HR director wasn’t sure if such a plan was feasible. With a lean staff and a tight budget, it was unclear if they could accommodate such a request.
Fast forward to today, and the company has successfully implemented phased retirement plans for more than 10 employees. The HR director herself is now considering a similar transition in the coming year.
Phased retirement, or “flextirement,” isn’t a new concept. Organizations like AARP have been advocating for it for over a decade, and federal agencies began offering it officially in 2014. However, the conversation around phased retirement has gained momentum in recent years. According to Principal Financial Group, which works with over 130,000 employers, there’s been a noticeable increase in interest and adoption of phased retirement programs. Their data shows that 11% of small businesses and nearly a quarter of large companies now regularly offer these programs.
What’s Driving the Shift?
The driving force behind this shift is generational. While many baby boomers still plan on a traditional retirement, more than two-thirds of Gen Xers now express a preference for gradually reducing their hours instead of stopping work abruptly. This trend isn’t just about financial security; it’s also about maintaining a sense of purpose and identity. People are looking for stability as they explore what their “next phase” will look like.
For companies, there are significant benefits to offering phased retirement. It allows them to retain experienced employees longer, giving them more time to train their successors and ensuring a smoother transition. For instance, replacing a seasoned project manager can be costly and time-consuming. But with a phased retirement plan, that experienced manager can continue to contribute effectively while training their replacements, leading to greater efficiency and cost savings.
Phased retirement isn’t one-size-fits-all, but it’s becoming an increasingly attractive option for companies looking to accommodate the evolving needs of their workforce. Employers considering this approach should ask key questions, such as when an employee loses access to benefits if their hours are reduced, or how the 401(k) program will be affected. Companies that anticipate a significant portion of their workforce will be interested in phased retirement over the next few years may need to adjust their benefits plans accordingly.
The importance of phased retirement is only going to grow as younger generations approach retirement age. According to recent data, Gen Xers aim to retire at 64, millennials at 59, and Gen Z as early as 55. If employers don’t start prioritizing phased retirement options, they risk losing valuable productivity and engagement.
Younger generations are clearly expressing how they want to work as they near retirement, and it’s time for employers to take note. By embracing phased retirement, companies can support their employees’ aspirations while ensuring a smooth and cost-effective transition. In doing so, they’ll create a more sustainable future for both their workforce and their business.
About the Author : Harry (Hemant Kaushik), Elite Global Advisor & Business Consultant
Harry (Hemant Kaushik) is an American global advisor and business consultant, renowned for his strategic insights and high-impact consultancy. He specializes in advising and coaching elite individuals, including business tycoons, world leaders, and top corporate leaders. His expertise has been sought by Presidents, Prime Ministers, influential politicians, CEOs, and industry leaders worldwide.
Recognized as one of the Top 10 Global Advisors and Business Consultants by PWC International, Harry has transformed the lives of thousands across more than 100 countries with his unparalleled guidance. He has also been honored as one of the Top 10 Life and Business Strategists, shaping the success of global business leaders and visionaries.
Harry’s influence has earned him prestigious accolades, including recognition by the CEO Times Magazine as one of the 10 Most Powerful People in Global Business Consulting, Business Times News as a Top 10 Business Consultant, and Business Weekly Times as one of the Top 10 Business Advisors in the World, offering consulting services to billionaires, celebrities, and high-net-worth individuals.
A Wall Street Times cover story famously dubbed him the “Elite Global Advisor & Business Consultant” for his deep understanding of business dynamics and leadership strategies. Based in San Francisco, United States, Harry is widely respected for his international economic expertise, market analysis, and strategic business acumen. His collaborations with global brands and corporations have positioned him as a thought leader, contributing to the business world through insightful articles on global economic trends.
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