What Does ‘Flextirement’ Mean? 3 Experts Break Down Benefits to Retirees’ Finances
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Josephine Nesbit
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“Flextirement” is the future of work, according to Fast Company. But what exactly is it?
You might think of flextirement as someone who retires from their full-time career and re-enters the workforce, picking up part-time positions to stay busy and social or for extra cash. However, Fast Company says flextirement involves striking a balance between employees and employers. It would allow employees to semi-retire and not fully leave the company but instead work in some part-time capacity on a project basis or in a mentorship role.
Richard Eisenberg, writer, editor and co-host of the “Friends Talk Money” podcast, recently interviewed several experts on the topic of flextirement for MarketWatch.
Neil Costa, writer of the Fast Company article and the one who coined the term flextirement, explained that a program could be a good option for both employers and older workers. He came up with the term when he and his colleagues discussed how to make jobs at their company more feasible for workers near retirement. One worker has begun flextirement, and another is in the process of starting.
“We’re trying to define a new employment status where you’re still an employee and can still take advantage of the benefits and still have a more intimate relationship with the company,” Costa said.
For employers, the benefit would be that they get to keep valuable, experienced workers longer, avoid knowledge gaps and empower the younger generation of workers.
Eisenberg also spoke with Cheryl Evans, director of the Milken Institute and co-author of “Shifting the Retirement Paradigm,” who said the concept of retirement as we know it is changing.
With flextirement, Evans said an employee’s salary and benefits would continue on a prorated basis, depending on how many hours or days the person works. For example, if someone works 40% of the time, they receive 40% of their benefits, Costa explained.
HR benefits consultant Jack Towarnicky is an advocate of what he calls “cost-effective, age-neutral, flexible employment,” but told Eisenberg that he doubts that many employers will offer this kind of arrangement. He explained that human resources departments with legal counsel have already decided what works, and until something disrupts that, he can’t see that changing.
But if some employers did decide to embrace flextirement, Towarnicky thinks smaller employers would have better success, and Costa expects flextirement programs will first appeal to employers with workers in types of roles you can do from anywhere, such as engineers, accountants and in creative services.
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