As companies struggle to find a balance between cutting labor costs and retaining talent, many are reevaluating phased retirement, which enables employees to work beyond retirement age by reducing hours and salaries. But as analysts at Deloitte find, this balance can be tricky.
“Phased retirement allows baby boomers to reduce their work schedules and salaries to fit their maturing lifestyle, and in many cases allows them to work past the traditional retirement age,” explains John Fiore, a principal within Deloitte Consulting’s Human Capital practice. “This can help a company significantly reduce its labor costs, without allowing critical knowledge and talent to walk out the door. It can also facilitate a smoother transition to the next generation of workers.”
CNBC retirement expert and Boomer Market Advisor November 2008 feature subject Bill Losey says phased retirement or decreasing workload for those reaching retirement age is one solution for boomers who are nervous about entering retirement relying on savings, portfolio earnings and government benefits alone.