Content prepared by the Sloan Center on Aging & Work at Boston College

Phased Retirement—At present, there is no single definition of phased retirement. In part, this reflects the different meanings of "retirement" and the numerous ways that employees transition from "working" into "retirement." Phased retirement is typically thought of as a transition period during which a worker reduces the numbers of hours worked until retirement. At the end of the specified time period, the employee might leave the former employer and either:

  • leave the labor force permanently;
  • leave the labor force temporarily with the possibility of seeking paid work in the future; or
  • two workers share a single position and decide together when each will work and which tasks each will perform;
  • look for work with a different employer or become self-employed.


At a large hospital, phased retirement practices are great for people planning to retire. These older employees can negotiate reduced time during the week. Moreover, as long as they put in 1,000 hours per year, contributions continue to flow into their pensions in amounts pro-rated according to the number of hours they work. One 84-year-old retired operating room nurse is now employed in [the hospital's] employee wellness department, giving tuberculosis tests. Putting in a minimum of 15 hours a week, she collects her retirement, her salary, and is eligible for part-time benefits. "We have 900 retirees and 90 of them are working for us. We actively recruit them," said [a spokesperson]. Expenses? She cited statistics indicating that the cost of replacing a health care professional is equal to one-and-a-half to two times that professional's annual salary. Flexibility, she believes, is a very good deal. (34)

Benefits to EmployeeBenefits to EmployerChallenges
  • In a 2005 AARP survey of Americans age 50 and older, 38% expressed interest in the concept of phased retirement.
  • In addition, 78% of those among survey participants who were interested in phased retirement stated that the availability of such programs would encourage them to work beyond their anticipated retirement age.
  • In the same study, "...one-third (33%) of retirees indicated that they would have remained in the workforce longer if a phased retirement plan had been offered to them." (12)
  • According to a 2009 MetLife study, "37% of employers acknowledge that an aging workforce will have a significant impact on their companies, yet only 17% of employers offer resources or programs, such as staged or phased retirement, geared toward the aging workforce." (63)
  • Phased retirement is a particularly complicated form of reduced hours work because employers' benefits policies may specify or constrain the access that employees working a phased retirement schedule have to pensions and retirement benefits.
  • According to a 2003 survey of over 500 employers, "less than 10% of white-collar employees have an opportunity for phased retirement that does not necessitate a loss of, or change in, health insurance; does not require taking on a different job; and does not entail retiring and subsequent rehiring." (51)