Phased Retirement Gains Popularity
Posted: Friday, January 15, 2010
It's no secret that older workers are reinventing
retirement, and that's a great thing. David Spence, 68, of Dallas, is president
of Awareness Awards. His plan to cut his work hours is on hold as he grows the
firm. “A lot about retirement is relieving the stress and the tension that most
managers go through,” he says. A growing trend is what's called
"phased retirement," which allows workers to cut back their hours but
still earn income. "It's a program – formal or informal, or even
self-created – to gradually ease into retirement, rather than doing a straight
stop," said Richard W. Jackson, a retirement planning counselor at
Schlindwein Associates LLC in Dallas.
Phased retirement is getting a boost from the sluggish
economy, as many people have discovered they can't afford to retire as soon as
they'd hoped. "The economic situation has moved this to the
forefront more than would otherwise have been the case," said Cynthia
Mallett, vice president for corporate benefit funding at MetLife. But a phased
retirement is not for everyone, and there are financial factors to consider in
deciding whether you can afford to do this.
Obviously, the primary financial benefit of
taking a phased retirement is that you continue to get a paycheck, which can
lessen the need to draw on your retirement savings, allowing the money to grow
further. On the other hand, when you reduce your work hours and salary,
that could have a direct impact on your employee benefits.
Source: Dallas Morning News (January 5,
2010)
From the NAELA eBulletin January 6,
2010 -- A weekly newsletter by Professor Kim Dayton, David McGuffey, CELA, and
Rajiv Nagaich. The eBulletin is published by the National Academy of Elder Law
Attorneys and is a benefit of NAELA membership.