There's a new variation on the unretirement trend. Rather than coming out of retirement and reentering the workforce, more baby boomers are choosing not to fully retire at all.
Fidelity Investments' State of Retirement Planning study, published March 12, surveyed 2,014 adult financial decision-makers over the age of 18 who own at least one investment account. Nearly two-thirds of respondents said they would prefer a phased retirement to an abrupt one, with 57% planning to continue working at least part time in retirement.
Remote and hybrid work options have given retirees more options, according to the report: 68% say they plan to pursue work for pleasure in their older age. But paychecks still play a role for many. Of the 25% who have already delayed or plan to delay their retirement, two-thirds said it was out of financial necessity, largely spurred by the rising cost of living and outstanding credit card debt.
The findings mimic a March survey from GoBankingRates, which found that 28% of Americans have $0 saved for retirement. Nearly a quarter of respondents told the company they doubted they would be able to retire by age 65, and another 30% said they do not expect to retire at all.
Phased retirements are a double-edged sword for companies, according to Korn Ferry. Miriam Nelson, PhD, a senior client partner in the firm's assessment and succession practice, says organizations should view the trend as a "longevity strategy." Employers can try out new roles for phasing retirees, and having experienced leaders onboard for longer is a "good thing from a talent perspective," Dr. Nelson said.
But Dan Kaplan, a senior client partner in the firm's CHRO practice, anticipates that boomers will become layoff risks as they gradually decrease hours and responsibilities. Leaders are zeroed in on productivity and efficiency, and it may be more fruitful for them to invest that employee's waning paycheck in AI or a fresh hire with growth potential.
Carolyn Vavrek, leader of the firm's North American assessment and succession practice, doubles down that phased retirees could become "blockers" and inhibit hiring growth in "critical feeder roles" that develop leadership pipelines. Ideally, aging employees looking to decrease responsibilities could take on roles in different areas of the business, Ms. Vavrek said; for example, they could serve as mentors or advisers for new managers, or help address talent issues at the company.