Transitioning to retirement by swapping full-time for part-time work is increasingly popular among Baby Boomers as it allows older workers to continue to build their superannuation balance while adjusting to semi-retired life. The trend is a dramatic shift from the way that their parents would have approached retirement, as Boomers look for new work opportunities before eventually calling time on their careers.
Media company WPP AUNZ’s recent Secrets and Lies report revealed that work still plays a major role in their lives of over-50s, with 69 per cent of respondents believing that age has never been less relevant when it comes to employment. Further to this, 61 per cent of the 2,000 survey respondents said they’re living the best years of their life, with many adding that they have no intention of retiring in the traditional sense, choosing to transition to part-time work before bidding farewell to paid employment altogether further down the track.
Yet, because it is a relatively new concept, not many organisations have developed a phasing into retirement program for their employees, according to a Society of Human Resource Managers report, which revealed just five per cent currently offer a formal transitioning to retirement program.
But this doesn’t mean employers aren’t open to the idea. Starts at 60 Money Club Expert and retirement planning consultant David Kennedy says going part-time can be beneficial for both parties in the long run, increasing productivity and leading to mentorship opportunities.
If you don’t have a clear motivation for transitioning to part-time employment, it might be difficult for your employer to understand why full-time work is no longer a priority for you. So, before scheduling a meeting with your boss, consider what you hope to achieve from cutting back your hours.
Perhaps it’s due to health reasons or a desire to make time for other activities, such as travel or to spend more time with family. Kennedy says while the decision to go part-time is becoming increasingly popular, everyone has different motivations and these need to be communicated effectively.
He also suggests considering whether it will be a part of your gradual transition towards retirement and how long you plan to continue working.
“It’s becoming more common for people to manage the adjustment to retirement by shifting to part-time work in their 60s, which may last for several years before stopping work completely,” he explains. “Communicating your motivations is helpful for you and your employer to ensure you’re both on the same page.”
While the decision to go part-time will certainly have many personal benefits, your employer might not be quite so thrilled with your reduced workload.
However, research published in the Journal of the International Society for the Investigation of Stress found those who are offered flexible working arrangements reported, “less stress, higher levels of commitment to their employer, and reduced costs to the organisation because of fewer absences, fewer days late and fewer missed deadlines.”
This is good news for those looking to move to part-time employment, as Kennedy says employers are more willing to offer part-time and flexible working arrangements where it can be shown that it will boost productivity and employee satisfaction.
“You might emphasise the positives of engaging you on a flexible basis such as retention of skills and experience, continuity of corporate knowledge through mentoring and the likelihood you will be available for more years into the future where you reduce your workload,” he explains.
All businesses operate in different ways when it comes to discussing working arrangements, but Kennedy suggests that a face-to-face conversation is the best place to start. This will give you a chance to explain your situation, your motivation to go part-time and the benefits it could bring to the company.
Be prepared to answer questions or offer solutions. Kennedy says there are five main questions which could be brought up in the discussion, these are:
From there, a formal proposal will be compiled, documenting the hours you wish to work.
If all goes to plan and your employer agrees to your plan to transition to part-time work, then you need to start figuring out what you are actually going to do with all the extra time.
Consider those bucket list items and start thinking about which ones you want to tick off first and what action needs to be taken to get you there. Perhaps you’ve been longing for an overseas holiday, or have always wanted to volunteer for a charity or a not-for-profit organisation – now is your time to start planning.
However, Kennedy says it’s not just the change in lifestyle that requires some thought, but the financial impact of reduced income.
“As you’ll be taking a pay cut to work fewer hours, it pays to understand how this will impact your budget and any implications for your retirement savings trajectory,” he explains. “Depending on your age, it may be a good time to look into whether you’re entitled to Centrelink benefits.”
Though there is no set retirement age in Australia, there are restrictions on when you can access your superannuation and receive the Age Pension. You can find more about the rules and regulations here.