Is a Phased Retirement Right for You?

Why It Matters:

  • A majority of today’s workers see themselves working into retirement age.
  • A phased retirement could solve for financial needs and still allow for free time.
  • Finding new work after 60 could mean trying a different approach.

Kastle Waserman tkc.profilePicture Written by: Kastle Waserman | Transamerica
July 31, 2019

5 Min readClock Icon

How do you envision your retirement? For most of our working years, we happily dream of when we can throw the alarm clock out the window and go play all day. However, with longer life spans, the traditional retirement age of 65 may leave you with 20 to 30 years to fill. That’s a lot of time. Will your savings support you? Will you get bored without work?

According to the nonprofit Transamerica Center for Retirement Studies®, more than half of workers (54 percent) expect to work past age 65 or do not plan to retire.1 

121157_0719 - Phasing into retirement_stats_v3

How will you know what do with your retirement years? If you’ve been planning, you may already know if you’re on track to have enough money to cover you after you stop working. If you don’t, the decision to work in your so-called “retirement years” is made for you.

As seen in those statistics, people have many reasons to keep working beyond generating income. In a previous blog, featuring Dr. Joe Coughlin (aka Dr. Joe), founder and director of MIT's AgeLab, he notes that working in retirement:

  • Helps you add to your savings rather than withdrawing from it
  • Keeps you physically and mentally active
  • Provides the opportunity for social interactions

Phasing into retirement

Many older workers are finding that phasing into retirement not only fulfills financial and social needs, but also helps them maintain a sense of purpose. Forty-four percent of workers envision a phased transition into retirement during which they will reduce work hours with more leisure time to enjoy life. Seventeen percent plan to work in a different capacity that is less demanding and/or brings greater personal satisfaction, says the TCRS survey.1

But what does a “phased retirement” look like? Currently, only about 20% of companies offer full-time employees an official program to cut back their hours as they approach retirement.2 If the company you work for doesn’t offer a transition program for those on the brink of retiring, it doesn’t hurt to ask if they would consider one. If you hit a wall, it may be time to look elsewhere.

First, ask yourself if you want to continue doing the work you’re currently doing in the same industry. If so, start by finding another company in that industry that will allow you to have more flexible hours as a freelance contractor, part-time worker, or remote worker. That flexibility lets you start enjoying more time off rather than facing the grind of going into the workplace for eight hours every day. Don’t forget about using all of your years of experience to do consulting or to look into teaching your hard-earned skills at community colleges or offering private sessions.

Now may also be your chance to try something new. What are your dreams or hobbies that have been on the back burner during your working years? Consider pursuing your love of the arts, animals, kids, or sports and look where you could pick up part-time work.

Set yourself up for success

Get yourself mentally prepared for the hunt. Job hunting can be a challenge at any age, but finding work later in life may be easier said than done. While ageism is a human resources no-no, older workers often face tough challenges in the job market with stereotypes looming that they are out of touch or slower on the job.

If you haven’t applied for a job in a while, be sure you’re presenting well. Get your resume and LinkedIn profile in order. Try formatting your resume as a functional or targeted template that highlights your abilities in a specific area rather than a chronological format that lists your work history.3 This may combat ageism by not revealing how long you’ve been in the workforce.

Use your credentials. Did you win awards for your work? Were you highly praised in manager reviews? Put that on your resume to show you are good at what you do. Don’t forget to practice for interviews by having some stories you can tell about how you brought success to your company, completed projects, and worked well with others.

Look at job descriptions in areas you would like to work and see what skills they’re looking for. If you don’t have them in your tool belt, consider taking some classes or getting certifications. Online classes for most skills are readily available to take on your time schedule so you can do it while you’re still working at the job you plan to retire from.

The value of the mature worker

As a worker with a long career, you have decades of experience to draw from. You may also have insight on different industries and job roles. You have a history of professionalism, responsibility, and perhaps even leadership. Show on your resume and in interviews how you made a contribution in your past jobs, how you brought in new ideas and delivered on their execution. Talk about an expertise you have that others, especially younger workers, don’t.

A recent news report revealed that some companies are looking to hire older workers over younger workers because they have better people-oriented “soft skills,” such as a friendly demeanor and punctuality.4 And if you haven’t read the news lately, the current state of low unemployment is creating a labor shortage — another factor you can use to your advantage.


Discover a number of online resources to help seniors who are looking for work.

AARP – It’s no surprise that this leading publication targeting 50+ readers has a substantial Work & Jobs section. Find out trends in hiring and get tips on how to update your resume, polish interview skills, and even search for current openings from employers looking for experienced workers.

Workforce50 – This is a great resource for job listings, advice for career-changers, tips for resume writing and seeking Federal jobs, as well as information for employers looking to hire older workers.

Retired Brains – With job listings, ideas for working from home, where to find senior discounts, and articles on topics of concern such as finances, travel and home issues, this website provides a wealth of information about working and beyond.

Factors to consider

Leaving the support of a full-time job with benefits can present some issues to think about, especially as you get into your 60s when Social Security and Medicare come into consideration.

  • Healthcare – If you are not age 65 yet, you are not eligible for Medicare. Transitioning into part-time work may mean you need to cover your own healthcare premiums in full. Be sure to factor that cost into your budget and requirements for how much money you need to make or are willing to pull from your savings.
  • Social Security – If you have started to collect Social Security benefits, don’t forget that working can reduce the amount you receive. It could be as much as a dollar for every two to three dollars earned. See our field guide to Social Security to learn more.
  • Medicare – If you’re age 65 or over and have started to collect Medicare, your income will affect how much you pay in Part B premiums if it’s over $85,000 as an individual taxpayer or $170,000 as a married couple filing jointly.5

Approaching retirement should be a time when you can take control of your life and live it the way you want. You can reflect back on years of hard work and responsibility to allow yourself to shift gears into a more balanced approach that matches your interests, financial, and physical needs. A phased retirement really can be the best of both worlds.

Download the infographic Four Tips to Phase Into Retirement.

Things to Consider:

  • Decide if a phased retirement is right for you and what you want to do for work.
  • Find out if your current employer has a program to transition into partial retirement.
  • When looking for part-time work as an older worker, use all of your experience to your advantage.


1 “What Is Retirement? Three Generations Prepare for Older Age,” nonprofit Transamerica Center for Retirement Studies®, April 2019

2 "Striking Similarities and Disconcerting Disconnects: Employers, Workers and Retirement Security," nonprofit Transamerica Center for Retirement Studies®, August 2018

3 “Resume Sample and Tips for Older Job Seekers,” The Balance, April 2019

4 “Seniors Replacing Teenagers as Fast-Food Workers,” The Gazette, November, 2018

5 “Does My Income Affect My Monthly Premiums for Medicare?,” AARP, December 2018

Transamerica is a proud sponsor of MIT AgeLab.

These sites are neither owned or controlled by Transamerica or any affiliated company. Web addresses are provided as a courtesy and are neither endorsed nor reviewed by any of the Transamerica Companies. You should consider all source of reliable information available before making any financial decision.

Neither Transamerica nor its agents or representatives may provide medical, tax, investment or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.



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