Phased Retirement: What Does It Mean And How Does It Work?

Around 19% of adults ages 65 and older areemployedtoday, according to Pew Research Center.

In 1987, only 11% of older adults were still working.

But something else is different about theretirementlandscape: phased retirement.

A senior citizen male runs out of an office with a smile on his face and papers flying everywhere.

If youre nearing retirement age but want to keep working in a scaled back way, consider phased retirement.

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What Is Phased Retirement?

The AARP describes phased retirement as, a broad range of flexible retirement arrangements.

So, theres no hard rule on what it needs to look like.

Its also a solid option to consider if youre unsure about quitting your days at the office cold turkey.

While its still a relatively new concept, theres a growing interest in it among older workers.

However, only about 36% of global employers offer phased retirement to everyone on staff.

Phased retirement allows older employees to ease into retirement while maintaining an income to support themselves.

Work arrangements may includepart-time employment, seasonal work, temporary positions and job-sharing arrangements.

Heres a breakdown of how its program works:

Eligibility requirements on phased retirement varies from employer to employer.

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Weigh these pros and cons before talking to your employer to make the most informed decision.

Are you financially ready to make the switch to phased retirement?

Youll also want to consider how it might change yourhealth care coverage.

Will you still be covered by your employers plan?

Or will you oughta explore other options like Medicare or private insurance?

And remember, dont make hasty decisions.

Unfortunately, insurance doesnt covereverything.These resourcescan help you manage those unexpected expenses.

Consider also talking to aretirement-focused financial plannerand a career counselor.

They can offer insights tailored to your situation and help you map out the best course of action.