Slow Ramp to Retirement

When you lean back in your ergonomic office chair and imagine retirement, you may envision a gradual transition that starts with reducing your full-time commitment to work and becoming a part-time employee.

That vision sustains many people who want to keep earning a little money, stay connected to their professional networks, and stay productive in early retirement. But before you assume that scenario will become reality, check with your employer.

A recent paper by the Center for Retirement Research at Boston College points out some reasons that employers don't always make it easy or possible for their employees to downsize. Here are a few:

Pensions. If you're among the minority of workers who still has a traditional pension plan, it may stand in the way of your plans to go part-time. The typical pension formula bases its benefits on an employee's earnings in the last few years before retirement. If you cut your work -- and your salary -- in half for a few years, your pension benefits will suffer.

This complication may be less of a problem in future years, as more companies shift away from pension plans to defined-contribution retirement accounts, such as 401(k)s. If that's the case, your eligibility to make 401(k) contributions or to receive your company's matching contribution may change, but you won't stand to lose the benefit.

Policies. Very few companies have formal policies that allow full-time workers to enter into phased retirement arrangements. Even if they do, it's often up to the company to decide whether business or employment conditions make the request feasible.

That means it will probably be up to you to sell the idea to your company. If you've been a highly productive worker and you've been on the job for a long time, your company may be more willing to listen to your pitch, but it will be up to you to explain how you can provide good value while committing less time.

Health insurance. Your company may not offer health insurance to its part-time workers. If that's the case, it probably will not be willing to make an exception for you. Many businesses don't want to carry the cost of insuring part-time workers. And, as the center's paper points out, morale can plummet at companies in which some part-time workers get coverage and others don't.

If you can get health insurance as a part-timer, the policy may be less generous than your full-time employee policy. The coverage may also depend on the number of hours you work per week. You'll need to factor all these things into your retirement planning.

Flexible hours. Just as few companies have phased retirement policies, few have policies that promote job sharing or flexible work arrangements. If your company does, you may be able to make these policies work for you while preparing your phased retirement pitch.

On the other hand, some jobs simply don't lend themselves to part-time work, especially if job sharing requires that you and your job-sharing partner spend a lot of time getting each other up to speed. Your employer may find it too inefficient to work. If you're in a supervisory role, in particular, you may also have to be willing to switch jobs to one that lends itself better to part-time employment.

None of this means you can't make your dreams of part-time work turn into reality. Start talking with the powers that be at your company about the idea before you want to make the jump. Don't assume they'll just reward your loyalty by agreeing to the arrangement. Anticipate all their questions and sell them on the prospect that you'll be a productive contributor, with a lot of experience they don't want to lose.

And if you'd like more advice on retirement-related issues, a free trial of Rule Your Retirement is yours for the taking. Click here for more details.

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Fool contributor Mary Dalrymple welcomes your feedback. The Motley Fool's disclosure policy has lumbar support.

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