If you ran a company and you knew that a significant number of your best, most experienced employees were about to walk out the door, wouldn’t you want to prepare for it? If these workers were within a few years of retirement, wouldn’t you want to take proactive steps to avoid having all that experience and intellectual capital disappear for good? According to a recent survey, 90 percent of employers are responding to those questions with a collective shrug of the shoulders.

Ignoring Phased Retirement Seems Baffling

Every so often we find ourselves baffled by the failure of people – including businesses – to accept the obvious. That was our reaction to this recent Liz Weston column on the NerdWallet website. The headline immediately grabbed our attention: “Your Company Is Probably Flunking Retirement Planning,” Weston’s column said. She writes, “Plenty has been written about American workers’ failure to plan adequately for retirement. Their employers seem to be doing an even worse job.” Her point is that, by refusing to embrace the concept of “phased retirement,” companies are being woefully shortsighted, penalizing older workers and harming themselves in the process. “Phased retirement, which isn’t common, can make sense for workers and employers,” Weston concludes.

Before exploring Weston’s assertions, we decided to visit this helpful article from Investopedia that explains just what people mean by “phased retirement.” It turns out that there’s no simple definition. Instead, Investopedia calls phased retirement “a broad range of employment arrangements that allow an employee who is approaching retirement age to continue working with a reduced workload” by permitting them to make a more gradual transition from full-time work to full-time retirement. It typically allows workers to gradually reduce hours (or days) worked, and then often makes it easier for retirees who want to stay employed to work part-time through reduced hours, seasonal work, temporary assignments and job-sharing.

Many Workers Would Embrace Phased Retirement

“The nature of retirement is changing,” says Investopedia. “Many workers wish to ease into retirement, transitioning out of the workforce with a reduced workload,” instead of making an abrupt and disorienting leap from working 40-plus hours a week to not working at all. The benefits to older workers are clear: they earn some important income while staying connected to the workplace, retaining a sense of personal contribution and self-worth. “From the employers’ point of view,” the article adds, “phased retirement programs can be used to retain skilled older employees who would otherwise retire (especially in sectors where there is a shortage of entry-level job applicants), to reduce labor costs or to arrange the training of replacement employees by older workers.” It’s a classic win-win arrangement.

Or is it? Not according to Liz Weston in her NerdWallet column who says that companies don’t seem to be getting on board. “Only 1 in 10 large employers offers a formal phased-retirement program,” she says, citing the 2018 Longer Working Careers Survey by professional services consultant Willis Towers Watson. According to the survey, which polled 143 large U.S. companies that employ 2.9 million people, less than a third of the companies surveyed offered their employees the option to work part time or switch to a less demanding job. We were also surprised by this finding from the Willis Towers Watson analysis: while 81 percent of employers say that managing the timing of their employees’ retirements is an important business issue, only one in four say they do this effectively. Talk about shortsighted.

Some Positive Examples of Phased Retirement

Fortunately there are a handful of firms who are on board with the idea of phased retirement. Liz Weston singled out these examples of actual company policies cited in a 2017 GAO report:

• Allow 55+ workers with ten years of service to cut their hours and their pay by 20 percent but keep health insurance and pension accrual benefits;
• Allow 60+ employees with five years of service to voluntarily reduce their hours by up to 50 percent;
• Allow 55+ workers with seven years of service to negotiate their own “glide path” to retirement while retaining benefits;
• Allow employees to switch to “less stressful or complex duties or phase to part-time work,” retaining health insurance if they work at least 25 hours a week.

As good an idea as phased retirement is, approaching an employer about it can be risky for an older worker, says Weston. “Employees may be afraid to inquire, lest they seem less than gung-ho about their jobs or get shoved out the door before they’re ready,” she says. With age discrimination still alive and well in the American workplace, as this recent AgingOptions blog post attests, these fears might not be unfounded. Some of the advice we’ve heard from employment experts is for older workers to keep their skills sharp and find ways to demonstrate their value to their employer by volunteering for new assignments and being supportive of change. But the best preparation for workplace uncertainty, we think, lies in comprehensive retirement planning.

Rajiv Says It’s Time to Take Charge of Your Future

“Today’s workers getting ready to retire tomorrow are in a jam,” says Rajiv Nagaich. “Government has failed them by reducing or eliminating the retirement safety net their parents enjoyed. Now their employers are failing them by refusing to create policies that make retirement more gradual and less burdensome. The best answer,” he adds,” is to take charge of your future independently by creating your own LifePlan.”

A LifePlan from AgingOptions is the only retirement plan we know if that takes all the key elements of your future into account – your finances, your medical coverage, your legal protection, your housing options, even your family dynamics – and weaves them together into one seamless plan. We often refer to it as a blueprint to help you create the retirement you’ve always dreamed of experiencing. Why not invest just a few hours and find out more by joining Rajiv for a LifePlanning Seminar? You’ll find a calendar of upcoming seminar dates here on our Live Events page where you can select and register for the seminar of your choice. There’s no cost whatsoever to attend and no pressure of any kind to make a purchase.

Don’t wait for Uncle Sam or your boss to do it for you. Chart your retirement course with the power of a LifePlan. Age on!

(originally reported at www.nerdwallet.com and www.investopedia.com)