A large segment of older employees is choosing a gradual approach to retirement, as shown by a new study from WTW. The 2024 Global Benefits Attitudes Survey indicates that one in three individuals aged 50 and older is currently transitioning into retirement or has plans to do so. This pattern includes cutting back on working hours or duties, signaling an increasing attraction to a slow departure from full-time employment.
The findings also indicated that nearly 30 percent of workers aged 55 and above were 65 or older in 2023, up from just 23 percent in 2000. Close to a third of respondents anticipate still being employed after the age of 67, with nearly half of older workers (46 percent) now expecting to continue working past the age of 70, a rise from 36 percent two years prior. The survey underscores persistent worries regarding retirement preparedness, with 79 percent of participants confessing they are not saving adequately, while only 52 percent feel they are on the right track.
Individuals in the transition phase generally plan to remain employed longer than typical retirees.
Gradual transitions influence retirement strategies
For example, employees who commenced their exit from full-time roles at 59 predict they will work for an additional nine years on average.
Jonathan Sterbanz, senior director of retirement at WTW, noted that a protracted farewell from the workplace could be advantageous for both employees and employers. “Reducing hours, even with less pay, can facilitate a smoother financial and emotional transition into retirement for employees,” Sterbanz stated. “Simultaneously, companies aim to retain their seasoned workforce and encourage them to share their extensive knowledge with younger colleagues.”
In this context, employer-sponsored retirement programs are becoming increasingly significant.
Among WTW’s survey participants, two-thirds of workers (66 percent) regard these plans as essential, and 72 percent consider them their primary method of saving for retirement. Chris West, WTW’s US LifeSight PEP leader, remarked, “Employers face the challenge of meeting both [workers’] immediate and long-term financial requirements. As key retirement savings tools, defined contribution plans can assist employers in achieving that balance.”
West further emphasized that innovations in retirement planning, such as pooled employer plans, could provide employers with enhanced flexibility for employees as they transition into retirement.
