Retirement Planning Advice: The Benefits of a Phased Retirement

How about a phased retirement? Instead of working 40 hours per week, talk with your employer about a reduced workload with a corresponding pay cut. The result could be just the answer you’re looking for.

Some employers allow workers over age 50 to work half-time at half-salary for up to three or five years while collecting partial pension benefits, if applicable. Often times, a half-time salary combined with a small pension or a monthly supplement from your own investment portfolio will result in a drop to a lower tax bracket.

Phased retirement is an attractive option for older workers because you continue earning an income while getting more free time for yourself. Your employer benefits by retaining a valued employee at a reduced cost. Often times an employer will free up those financial resources to hire an additional employee and improve productivity. It’s a win-win for everyone.