A significant portion of older workers are opting for a gradual transition into retirement, according to a recent survey by WTW. The 2024 Global Benefits Attitudes Survey found that one in three workers aged 50 and older are either already phasing into retirement or plan to do so. This trend involves reducing work hours or job responsibilities, reflecting the growing appeal of a gradual exit from full-time work.
The survey also revealed that nearly 30 percent of the workforce aged 55 and up were 65 or older in 2023, compared to just 23 percent in 2000. Almost a third of people expect to still hold a job beyond age 67, with nearly half of older employees (46 percent) now expecting to work past age 70, up from 36 percent two years ago. The survey highlights ongoing concerns about retirement readiness, with 79 percent of respondents admitting they aren’t saving enough and only 52 percent feeling on track.
Those transitioning often expect to work longer than traditional retirees.
Phased transition shapes retirement plans
For instance, employees who began phasing out of full-time work at age 59 anticipate continuing for another nine years on average.
Jonathan Sterbanz, senior director of retirement at WTW, said a drawn-out farewell to the workplace could benefit both employees and employers. “Working fewer hours even with reduced pay can help employees transition into retirement both financially and emotionally,” Sterbanz said in a statement. “At the same time, companies want to hang onto experienced employees and encourage them to pass on their wealth of knowledge to younger employees.”
In this environment, employer-sponsored retirement plans are gaining importance.
Within WTW’s survey pool, two in three workers (66 percent) see such plans as crucial, and 72 percent rely on them as their main means to save for retirement. Chris West, WTW’s US LifeSight PEP leader, said, “Employers are faced with the challenge of how to best meet [workers’] current and long-term financial needs. As the primary retirement savings vehicles, defined contribution plans can help employers reach that balance.”
West also highlighted how developments in the retirement plan space, such as pooled employer plans, can help employers create more flexibility for their employees as they shift into retirement.
