Phasing Into Retirement

At first, retirement might be like a vacation. No alarms clocks, no commuting, no meetings or bosses. But some people who retire actually miss the office and want to return to work at the same company. No so fast! About half of companies have rules in place that don't allow you to waltz back over to your old desk and reclaim your paycheck and benefits after you've officially retired.

A new survey of more than 140 midsize and large employers by the human resources consulting firm Hewitt Associates found that 45 percent of the companies surveyed have restrictions in place that limit the ability to rehire previously retired employees. Common policies include a minimum period of absence (typically six months or less) before an employee can be rehired (42 percent), a limit on the number of hours a retired employee can be re-employed (31 percent), or allowing retirees to return to work only as employees of an outside contractor or leasing agency (29 percent).

Of course, you can avoid these rules by returning to work with a different company or by phasing into retirement with your original company by cutting back working hours instead of officially retiring. About 47 percent of the companies offered some form of phased retirement, typically negotiated on an ad hoc basis between individual employees and managers. Another 39 percent of the firms surveyed expressed interest in starting a phased retirement program.

Hewitt found that employees near retirement age were often willing to stay when they could work part time, year round (65 percent), get access to retirement benefits (37 percent), perform a different or related job in the company (16 percent), telecommute or work from home (15 percent), work part time, seasonal employment (14 percent), or get a bonus to stay (14 percent). You can also check out this survey about what would have persuaded recent retirees in the aerospace and defense industry to work longer.

Tell us, would you like to gradually cut back your hours before you retire or just jump right in?