We’re Giving Away $50,000! Enter Now. See Official Rules




Contests and

Free Fun!

AARP Games - Play Now!

PROGRAMS & resources

Best Employers for Workers Over 50

Check out the winners list and latest news about this AARP recognition program.

Employer Resource Center

Attract and retain top talent in a changing workforce.

Your Own Business

Information for business owners, entrepreneurs and the self-employed.


Learn From the Experts

Sign up now for an upcoming webinar or find materials from a past session. 

Most Popular


Your Financial Future

Phased Retirement Is a Win-Win for All

Not ready to stop working, but you'd like to work less? Here's how you can, and why your employer should let you.

Larry Kupper was 68 when he shifted into half-time work for half-time pay at the University of North Carolina at Chapel Hill. Kupper, an alumni distinguished professor of biostatistics, had started his teaching career there 37 years earlier, and he was ready for a change.

“I was ready, at this time in my life, to do some other things, and I got tired of doing some of the things I had been doing for over 30 years,” he said. Now Kupper is spending his increased free time working on his seventh book and learning to cook.

While still an active faculty member, he was able to turn over running a program that helps graduate students get doctorates in biostatistics to a younger colleague. “It means a lot to her, and I was getting tired of it,” he said. “I think it’s a win-win situation.”

That’s a phrase that comes up often in descriptions of phased retirement. But if it is a win-win situation, why has this option been so slow to take off?

Despite provisions in the Pension Protection Act of 2006 that were supposed to make it easier to offer phased retirement—which allows workers to cut back hours without sacrificing pension benefits—relatively few companies have adopted it.

“Phased retirement is currently akin to motherhood and apple pie—win-win for everybody,” said Allen Steinberg, a principal and senior consultant in the human resources firm Hewitt Associates’ retirement and financial management practice. “That said, it is relevant only for employers who are seeing potential shortages of experienced workers.”

Hewitt recently surveyed more than 140 midsize to large employers and found that only 5 percent have formal phased retirement programs. While not many consider it a major need now, three times as many said it might be valuable in five years as the exodus of boomers from the workplace increases.

One company facing that future now is Public Service EnterpriseGroup (PSEG), an energy company headquartered in Newark, N.J. After a proposed takeover of PSEG by Exelon Corp. was abandoned in the wake of regulatory concerns, the company found itself with a shortage of talent in the executive ranks because so many officers had left in anticipation of the merger or after it was called off.

“We were looking for officers, and upper management was looking for ways to retain skills and experience,” said Charles L. Miracola, PSEG’s manager of corporate benefits. So the company launched a phased retirement program, which allows employees to work up to 24 hours a week for a year and still draw retirement benefits. Miracola said that the program has helped with transitions and with training replacements. The company also allows retired workers to be rehired, usually for projects, without sacrificing benefits. So far the program applies only to nonunion employees.

The Hewitt survey mentioned what companies said were several possible impediments to adopting phased retirement plans, including legal and regulatory barriers, company culture, lack of support from senior leadership, and manager resistance. But at PSEG, management supportedthe plan to help it rebuild its executive ranks, Miracola said.

Phased retirement at the University of North Carolina has been in place since 1998, said Kitty McCullom, vice president for human resources and university benefits officer for UNC. About 698 faculty members have taken advantage of the plan. About 20 to 30 percent of those eligible for retirement opt instead for the reduced workload each year.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts


Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.


Jobs You Might Like

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Member Benefits AT&T Wireless Cell Phone

Members save 10% on monthly usage charges on qualified AT&T wireless plans.

membership adt

Small business owners save 20% on new installation of any new ADT security system.

UPS Store membership discount aarp benefits

Members save 15% on eligible products/services and 5% on UPS shipping at The UPS Store®.

Member Benefits

Renew today! Members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points


Advance your skills. Transform your career.

Explore your learning possibilities.