Workers in the baby boom generation would delay normal retirement if they could ease into it, according to a new survey by Watson Wyatt Worldwide, Washington.
One out of three workers aged 50 and up said that they would continue working longer if their employer offered a phased retirement program, such as shorter work weeks or flexible hours.
But few employers have yet to set up formal or informal arrangements that would influence older workers to delay full retirement, Wyatt says.
The survey of 1,000 retirees and workers near retirement age found big changes in attitudes about withdrawing from the world of work.
Nearly 24% of workers over age 50 already are phasing into retirement in some way, Wyatt found.
But the firm also found a dramatic gap between what older workers would like and the opportunities employers provide. For example, most survey participants would like to work less hours late in their careers, but fewer than half of them expect their employer to let them.
Commenting on the survey findings, experts observe that people in phased retirement need financial advisors who take a well-rounded approach to their needs. Phased retirement can present an array of financial challenges, they note.
For instance, the Watson Wyatt survey found, many employers cut back or eliminate benefits for phased retirees, just as they do with any part-timer. More than half reduce or eliminate life insurance benefits, while a third cut disability insurance.
“One of the main things people in phased retirement worry about is how long are they going to have health insurance benefits,” says Michael T. Smith, president, CPS Horizon Financial Group, Hales Corner, Wis. “But they dont look beyond that. They forget about disability, adding contributions to their 401(k) or what life insurance they might have.
“Many times their main insurance policies may be purchased through their [employer] group,” observes Smith.
The advisor can help them find alternatives, Smith notes. For instance, a client who loses group disability insurance might find an individual policy too costly.
“So, they may take critical illness insurance instead,” Smith suggests.