What is Phased Retirement?

Hey, welcome to this segment on What is phased retirement? This is a new trend where employees that are nearing retirement start to shift the amount of hours they’re working or the amount of responsibility that they’re taking on. If you think about this, there’s a statistic out there from Trans-America Center for Retirement Studies that say that by 2024, 55% of the workers are going to want to reduce their hours or their responsibilities. How can this be a win win? Well, recently I had a client come in that had been working for this company for 30 years. I simply said to them, so what do you do? And they just looked at me and smiled. And I was like, okay, maybe what’s your job description? And then they laughed. You know, they said, I’ve been working for this company for 30 years. The amount of experiences and responsibilities that I have are locked in my head. And, you know, that’s great from an employer that can trust that kind of employee. But now it becomes a difficult challenge. If that employee is lost, now look at what kind of challenges the business might have. So what they started to do was this phased retirement where the responsibility of the employee, as they prepare for retirement, is to start passing on those life experiences, those job experiences, the wisdom of evaluated experiences onto the next generation of work force. How has that been beneficial for the employee? They love it. Okay? They love it because their hours are changed now. They don’t have to be in the grind. They are looked at for a ton of wisdom and they still have some responsibilities but it’s different. It’s teaching, it’s coaching, it’s growing those leaders in the company. And so they have a great purpose. They have extra time on their hands, it’s not a forty-hour job anymore. They have better vacation that they can then utilize where they went to their employer and they said, I really like going to the UP for two weeks in the middle of the summer. I really like going south in the winter for a couple months to get warm. I really like what I’m doing with your company. And they had mapped out what this ideal retirement or phased retirement would look like. And then, after they got that ideal retirement, they went and they had that conversation with their employer. Now let’s look at the employer standpoint. From the employer standpoint, that could be the most strategic thing that you do, is start that succession plan, start preparing and growing that next generation of work force that is going to help your company succeed. You know when the conversation was relayed that the employee to the employer, there was some nervousness with that phone call. But their big ask was welcomed. The employer was very appreciative that they would have that conversation instead of just putting in their two weeks and leaving them high and dry. They said, no I have loved this job, I have loved this career. And I want to leave you in an awesome position. But there is a lot of stuff that’s going on in my head that I need to have some time to teach so that it can be a smooth transition. And their plan is to do this for a couple years and then they are going to fully retire. But I know the employer welcomed the ideas. And so if you’re sitting there and you’re like, okay Jack, that’s great, cool, good story. How does that apply to me? Okay. Anytime you have to make big decisions or big asks or anything like that, I learned a little equation, okay? If you change your place and you change your pace, you can change your perspective. So if I have to make a big decision, I go find a very quiet place that when I look up it is nothing but God’s beauty and then I can just think deeply. And I can think long terms. And I can have conversations. And I can start to get a divine download on what that decision might be. And so once you start with ideal and you just really map out ideal. I suggest forget reality for a while, just see what is your ideal. And then you start figuring out, okay how do we strategize to take our reality to our ideal. So if you’re sitting there and you’re wondering about what a phased retirement might look like or if you have any questions and you’d like our advice, we do this all the time. We love to help people. So feel free to reach out to us at any time here at Centennial Wealth Advisory.