We need to change how we talk about retirement at work

Increasingly, research shows that a gradual transition – working less overtime or exploring part-time phases and taking sabbaticals before full retirement – can provide significant benefits for both employees and employers.

Many other older workers also choose to access their super while continuing to work, maintaining their engagement with the workforce. Thanks to remarkable improvements in health spans, so many people have both the energy and expertise to contribute meaningfully, albeit in new and different ways.

Employers who ignore these trends really do risk losing invaluable experience and missing out on effective succession planning opportunities that might have helped them better embed responsible work practices in younger employees.

Open conversations about retirement, on the other hand, unlock so many win-win outcomes. These discussions could help employees navigate the often-confusing runup to retirement with greater clarity and confidence.

They could also enable phased retirement programs that allow employees to gradually reduce hours while maintaining involvement. Employers could offer part-time or project-based roles that leverage the strengths of older employees while meeting organisational needs to shift costs.

Finally, they could introduce mentoring programs where older employees can transfer their knowledge, fostering continuity and goodwill.

Fact is, employees who leave a workplace by choice are far more likely to adapt well to retirement and maintain positive feelings about their former employer. In contrast, those retrenched or forced out often face significant psychological impacts, with studies showing it can take up to two years to recover a sense of competence and self-worth.

Secrecy, however, undermines all these possibilities, leaving both employees and employers unprepared. Instead, employers could do things to encourage their older workers to stay engaged, loyal, and enthusiastic and take the journey together, just like they do with maternity leave.

Workplaces would be much more appealing if they worked harder to combat ageism and created cultures where employees feel safe discussing their futures and their visions of retirement.

Providing resources like retirement education programs or access to financial advice can help employees make informed decisions too – so they don’t fear leaving the workforce one day and hide from it.

Offering tailored options – such as phased retirement programs or project-based roles—can keep older workers engaged while ensuring the organisation benefits from their expertise. Supporting employees in this way isn’t just ethical; it’s strategic.

Why older workers should stay engaged

There’s another conversation we have to have on the other side too – because it shouldn’t all be on the boss. For employees nearing retirement and counting down who want to be supported by their employers, staying invested in your work is essential to maintaining the respect and ongoing support of your employer.

They are paying you to do a job, and that job usually requires you to stay up to date and interested in what you’re doing even if the end is nigh. Keeping your skills sharp and your professional attitude strong can open doors to flexible arrangements – but only if you’re proactive.

If this is you, then take time to talk to your employer about options like reducing hours, taking on a mentoring role, or adjusting responsibilities. If you show that you’re still engaged and valuable, employers are far more likely to accommodate your needs.

There’s a financial incentive, too. Employees who discuss their plans can leverage smarter strategies in their final years of work with the boss’ support. Things like:

• Phased retirement, gradually reduce your hours, stepping down your work income carefully and allowing time to adjust your budget and retirement plans as you experience the changes.
• Salary sacrifice, boosting up your superannuation contributions using voluntary salary sacrifice during your final working years to maximise savings before you finally stop work.
• Using your leave strategically by allocating your accumulated leave to extend your earnings or create a buffer for your transition.
• Or taking your long service leave as a sabbatical rather than a payout. It’s often more effective to take it while still employed rather than cashing it out. This way, you’ll earn superannuation on the long service leave pay and retain insurance benefits like life and TPD coverage during that period.

These options can stretch your savings and super over a longer period, but they’re usually only accessible if you’re willing to have the conversation. And conversations are a two-way street.

Bec Wilson is author of the bestseller How to Have an Epic Retirement. She writes a weekly newsletter at epicretirement.net and is host of the Prime Time podcast.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.

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