Partial Retirement

Defining Partial Retirement

The term “partial retirement” is seldom used to describe the practice of taking a one-time reduction in schedule from full time to a stated percentage over a designated period of years. But that is exactly what it is. In other societies and the rare companies which regularly practice flexible paths to retirement, the distinction is made between “phased” and “partial” because they pose different opportunities, management issues and comp and benefit arrangements. 

In the United States, we have fallen into the imprecise language that confuses one with the other and thus limits choices that can matter to both employer and employee. So while neither is broadly practiced by most employers, it is important when you are considering one of these options that you be clear what you are seeking. 

The choices covered on this site are gradually reducing time worked from full time to full retirement (“phased retirement”), choosing a one-time reduction and staying with that schedule for a number of years  (“partial retirement”) or being terminated and brought back as a full or part-time contractor (“contracting.”)

A typical example of partial retirement is a reduction from a 100% to 80% time schedule for a period of several years. This timeline could be shortened or lengthened by mutual agreement. If your employer already has formal part-time work, similar compensation and benefit proration would apply. If such policies don’t exist, models can be accessed by signing up for The Refresher. 401K pension payouts are not affected by this option. Workarounds for less common defined benefit pension plans can be found through the The Refresher.

Employee Benefits and Challenges of Partial Retirement​

There are both benefits and challenges for employees and employers/managers in this different way of working. Which apply to your situation and to what degree will depend on many factors. And of course these are not exhaustive lists. Keep this in mind as you consider the feasibility and desirability of this option, as you make and negotiate this desired change.

Benefits Can Include:

Challenges Can Include:

Employer and Manager Benefits and Challenges
with Partial Retirement

The offering of flexible and partial retirement can be seen as a significant or modest change in an organization. It is important to recognize that there are different impacts on the employer and the direct manager. Ideally these are complementary, but there can also be some tension between longer term business goals and the day-to-day requirements of making phased retirement work for a certain person within a unit or team. 

The range of potential outcomes follows. The party in parentheses will be primarily affected.

Benefits Can Include:

Challenges Can Include:

Manager = Mgr | Employer = Eer

Making Your Proposal

Having reviewed the Qualifying section and with this information as background, you can decide to proceed – or put this idea on hold for a later day. If you choose to go forward, follow the steps outlined in Proposing, Planning and Persuading. The process we outline is a rigorous one. It is designed to position you and your proposal for success. Since you may well be a pioneer in your organization as you go forward, it is important to understand that while the outcome of such ventures is never assured, there will definitely be hard work along the way.