What Is Phased Retirement

Category: Finance, Financial Planning.

The western world is going to experience a major impact from 2010 and onwards and it s an impact that s been predicted for sometime. We re talking about the mass exodus expected from the workforce by our baby boomer generation who number about 80 million just in the United States.

Strange thing is, there doesn t seem to be much going on to avoid it. They also make up about one third of the work population which is a little frightening when one considers the consequences. It s not just an aging population, it s also an aging work force and the question needs to be asked. "Can industry afford to lose such a highly skilled generation in mass proportions? The Aging Work Force. The short answer is no, yet retirement planning is one of the main issues when people get close to the golden age of hanging up the work boots. Is there the same skill set to replace them? What would happen if one third of the work force phased out over several years?

Industry To Suffer From Mass Exodus. It s the expertise factor which is going to hurt many industries. Industries such as teaching and nursing are expected to suffer through loss of expertise. There is good news on the horizon though. Planning for retirement should sensibly start at a very young age, preferably in a person s twenties yet sadly, many haven t started building a nest egg until they hit their forties. Good news if you plan to keep working after hitting retirement age. The topic of phased retirement has started to become more and more widely discussed and while we may not see it come to fore until baby boomers decide to call it quits, phased retirement is already being tried in some industries.

In a nutshell, it s simply an option for people who want to keep working but don t want the long hours associated with it. What Is Phased Retirement? In other words, it s a reduced and more flexible work schedule. The retiree gets to keep earning income while the employer retains a lot of the expertise they worked so hard to establish over a number of years. It really is a win- win situation. Studies during 2007 have indicated people who suddenly retire without any significant purpose in their lives, find it tough going and having purpose is what makes this option very attractive. There are still some issues which need to be ironed out but when one talks of" buzz words, " it s quite likely that phased retirement will dominate discussions very soon.

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