Helping employees find a retirement path

Instead of traditional retirement, many employers are now offering phased retirement packages, which allow employees to continue working but with scaled down hours and pay. Steinberg says this gives baby boomers the chance to become more financially stable while still impacting the work force.

"Historically, retirement and work were two mutually exclusive states," Steinberg says. "You would work full time, and then when you stopped, you were retired full time. In recent years, though, there's been a movement toward something in between with phased retirement. They can continue to draw a partial paycheck, but they can also continue to contribute while starting to phase into retirement."

In a phased retirement package, health care benefits are even continued as an incentive for baby boomers to consider retirement, Sweeney says. Many private-sector employers can no longer afford to offer health care benefits through someone's entire retirement life, but this removes the stress of falling into the ranks of the uninsured.

"For perhaps the next five years after you retire, an employer will allow a retiree to continue as a participant with a gradually increasing premium," Sweeney says. "That helps offset the fear of loss of health insurance. At the same time, it allows a person to go out and find another option."

Phased retirement also benefits employers because it installs a system for backfilling with reverse mentoring, Sweeney says. Over the years, many employers have failed to adequately prepare talent replacements for certain skill sets, but as the baby boomers are reducing their roles, they can take the time to mentor younger employees. Once the older employee retires, a younger worker can come in at a cheaper rate with the necessary skills and training.  

For phased retirement to be effective, support from top management is crucial, Steinberg says. Some managers don't like the added hassle of phased retirement, and without top management backing, implementation could be difficult.

"The most important component of phased retirement is you need the support of management and leadership," Steinberg says. "I hear again and again that a lot of mid-level managers just don't want the hassle. They want people there full time. It makes scheduling easier; it makes management easier, so you really need leadership support from top of organization. If middle-managers don't buy into phased retirement, they'll just undermine it when you're not looking."

If phased retirement is handled correctly, baby boomers can achieve their retirement dreams while maintaining a positive relationship with their respective employer, Sweeney says. Phased retirement gives the impression that an employer cares about its work force, and this also sets a positive attitude among the younger employees who are watching how the baby boomers are being treated.

"These are relatively accepted programs and have a pretty good following, which puts an employer in the situation where they have a good way to move out people from the organization who want to retire," Sweeney says. "An employer has the next generation to backfill behind the baby boomers, and they're going to see how those older workers were treated, and it will affect how they view the company culture.

"Did they just throw away these people or give them opportunities? This gives employers a chance to show they are concerned and would like to lend a hand to individuals who are trying to get out of the workplace."