Amid falling confidence, 1 in 3 U.S. employees wants to phase into retirement
22 August 2024 - 1:40AM
While millions of older working Americans are delaying plans to
retire amid mounting financial concerns, another group of employees
are taking a different path: phasing into retirement. That’s
according to new survey research from WTW (NASDAQ: WTW), a leading
global advisory, broking and solutions company.
The 2024 Global Benefits Attitudes Survey found one in three
(34%) workers age 50 and older either have already started phasing
into retirement (15%) by reducing their work hours or job
responsibilities as they near retirement or want to do so (19%).
Most of these employees want to transition into retirement over a
long period of time. For example, those who started phasing into
retirement at age 59 expect to work nine more years. The survey
found similar results for workers who want to phase into retirement
when they are older.
Most workers who are currently phasing have reduced their work
hours (61%) or job responsibilities (41%). Slightly fewer numbers
of employees want to change to a different role or job in their
industry or change where or how (more or less remote) they work.
When asked what was driving their decisions about when and how to
retire, the top reason was financial security (76%) followed by
their health (50%) and having more time for family, leisure and
travel (45%).
Interest in phased retirement comes at a time when nearly half
(46%) of older workers (age 50 and older) expect to work past age
70, a sharp rise from 36% two years ago and 30% prior to the
pandemic. Additionally, eight in 10 workers (79%) admit they aren’t
saving as much for retirement as they should be, and only half
(52%) report being on the right track to retirement.
“Phased retirement can be a win-win for both employees and
employers,” said Jonathan Sterbanz, senior director, Retirement,
WTW. “Working fewer hours even with reduced pay can help employees
transition into retirement both financially and emotionally. At the
same time, companies want to hang onto experienced employees and
encourage them to pass on their wealth of knowledge to younger
employees. Still, most employees think their employers can do a
much better job of leveraging the skills of older workers.”
Indeed, only 30% of respondents rate their employer as highly
effective at using the skills and knowledge of older workers.
Interestingly, two in three employees (67%) believe it’s important
to be a mentor and to help train less experienced colleagues before
they retire.
The importance of a retirement plan in creating
financial security
According to the survey, two in three employees (66%) said their
employer-provided retirement plan is more important than ever, with
three in four (72%) saying it is the primary way they save for
retirement. Additionally, over half of employees (55%) cited their
retirement plan as an important reason to stay with their current
employer, compared with 48% in 2017.
“With employees seeking greater flexibility around their
retirement decisions, employers are faced with the challenge of how
to best meet their current and long-term financial needs. As the
primary retirement savings vehicles, defined contribution plans can
help employers reach that balance. Utilizing available options
within their defined contribution plans, along with other
developments in the marketplace such as pooled employer plans and
lifetime income solutions, will give employers the tools to enhance
their benefits in order to provide employees with flexibility as
they prepare to retire,” said Chris West, U.S. LifeSight PEP
leader, WTW.
About the study
The 2024 Global Benefits Attitudes Survey was conducted from
January to March 2024. Respondents include 10,000 U.S. employees
working at medium and large private sector employers, representing
a broad range of industries.
About WTW At WTW (NASDAQ: WTW), we provide
data-driven, insight-led solutions in the areas of people, risk and
capital. Leveraging the global view and local expertise of our
colleagues serving 140 countries and markets, we help organizations
sharpen their strategy, enhance organizational resilience, motivate
their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover
opportunities for sustainable success—and provide perspective that
moves you. Learn more at wtwco.com.
Media contacts
Ed Emerman: +1 609 240 2766eemerman@eaglepr.com
Ileana Feoli: +1 212 309 5504ileana.feoli@wtwco.com
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