Breaking up is hard to do. That’s certainly true for a growing number of older workers who make up an outsized proportion of the U.S. workforce and are seeing strong demand for their decades of experience and skills.¹   

Adults ages 65 and older made up 29.5% of the workforce in 2023, compared to an estimated 23% in 2000, according to research from the Employee Benefit Research Institute. Increased life expectancy and economic necessity are contributing factors to the bump, but not the only ones.² 

More Americans are keeping their careers well into their 60s and beyond as a way to stay sharp, productive, and socially engaged. Some simply love their jobs or find themselves at the top of their professions as they near traditional retirement ages.³ The trend is especially true for careers including lawyers, teachers and professors, and small-business owners.⁴

Holding onto a career doesn’t mean delaying the good life. Many older workers are gradually cutting back on hours and job responsibilities while ramping up leisure and vacation time — a transition period known by many names including phased retirement.⁵  

The trend differs from “unretirement,” where many older workers go back into the workforce after making a clean break — although many of the underlying reasons are the same.

Read more: The unretirement surge: Boomers and Gen Xers are heading back to work

Older workers prize flexibility 

A 2024 survey from consulting firm WTW found that 15% of U.S. workers over the age of 50 are phasing into retirement while 19% would like to in the future. Many workers are transitioning informally due to a lack of formal employer programs.⁶

While there isn’t any hard data on the number of Americans phasing into retirement, some employers have had programs in place for decades. Such initiatives are typically found in government, universities, and technical professions and usually include set time periods for reduced hours and pay, typically with continued benefits.⁷

Informal programs are more common and come in several forms, such as a worker transitioning from full-time to part-time hours or negotiating a deal with their employer for ongoing roles such as consulting work.⁸ In other cases, full-time workers might be taking advantage of corporate benefits aimed at tenured or older employees, including paid sabbaticals that can last several months.⁹

In addition to competitive pay, many older workers value flexible work arrangements.¹⁰ A growing number of companies offer unique benefits to older workers like grandparent leave. The time off can range from a day to a couple of weeks.¹¹

A less stressful transition 

The proliferation of remote and hybrid work options since the pandemic has also made it easier for older workers to have flexible or part-time arrangements that balance well with easing into retirement.¹²

New research from Empower shows that 45% of Americans feel financially prepared for retirement, with Baby Boomers feeling the most confident at 55%.

Some workers see phased retirement as a less stressful transition than full retirement, both financially and emotionally. A continued paycheck allows more flexibility to pursue hobbies and leisure activities at one’s own pace — while keeping options to bolster retirement savings or other tax-advantaged benefits like healthcare spending accounts.¹³

Read more: What are the benefits of an HSA Account?

Sharing knowledge and expertise 

Employers have their own motivations. Older workers above age 50 are in high demand for their professional experience, company loyalty, and mentoring skills, according to the Society for Human Resource Management.¹⁴

Many companies see phased retirement as a key element of workforce planning to help reduce any sudden losses of knowledge or expertise. Mentoring and knowledge-sharing arrangements are a central feature of many formal phased retirement programs, including one at NASA.¹⁵ 

While senior professionals are seen as a valuable resource to mentor and train younger employees, it’s also a two-way relationship. Older professionals see opportunities to sharpen their toolkits and learn new workplace approaches from their peers.¹⁶  

Older workers value upskilling and access to continuing education, with support from their employers. More than half of Baby Boomers and three quarters of Gen Xers said it was a workplace priority in a recent survey. ¹⁷

Read more: Where the job market is heading in 2025: 7 trends to anticipate