Every day this year we will see a record number of Americans reaching the typical retirement age of 65. As the workforce rapidly approaches retirement, there is increasing interest from employers and employees in a phased retirement approach – especially as macroeconomic pressures are weighing on employees.

According to the most recent Principal Financial Well-Being Index^SM (WBI) released in January 2024, among those still in the workforce, gradually decreasing hours is the most desired way of retiring (52%) and is the most preferred method for millennials (56%) and Gen X (67%). As attitudes and expectations continue to evolve, it's likely that phased retirement will become more prevalent in the near future. In fact, 3 in 4 financial professionals and employers think that by 2030 most participants will be able to take a phased approach to retirement (according to the Principal Future of Retirement Survey, 2023).