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April 21, 2024

How to have a conversation about retirement as a leader

As the population ages, the nature of retirement is changing, and it is important for organisations and their leaders to be aware of this. Historically, retirement was a standard process of a quick and permanent exit from full-time work at 65 years of age. Now there is no formal retirement age in most circumstances, and people are working longer either by choice or necessity. Some workers are seeking alternative forms of retirement, including phased retirement, transitioning into unpaid work, entering an entirely new field, or starting a business.

Organisations need to engage older workers before they begin to think about retirement. Rachael Palmer, who led Transitioning Well’s Ageing Workforce Ready Project, says what organisations need to do, in collaboration with employees, is find out what are the most appropriate work adjustments for older workers. ‘Ask, don’t assume’ what your workers need in this life stage. 
 
“The alternative is, all the wisdom, experience, emotional intelligence, diversity – all these things that are good for business – walk out the door,” says Rachael Palmer.  

As a leader, navigating the conversation about retirement can be a delicate dance. You might be wondering how do you initiate the conversation? How do you have the conversation without seeming insensitive? What do you say if they want to keep on working?  

While some older workers may be planning  permanent retirement, others will prefer a phased retirement, or some may be feeling ‘stuck’ emotionally or are unable to retire due to financial reasons.  

Initiating the conversation about retirement is often avoided by leaders due to it’s sensitive nature. However, with thoughtful planning and clear communication, you can maintain a positive working relationship and ensure a smooth transition in the late career phase for both the individual and the organisation.  

Laying the Groundwork: Know Your People 

The “know your people” principle is paramount. Regular check-ins, not just performance reviews, provide an opportunity to gauge an individual’s future plans. Listen for subtle cues about retirement aspirations, such as changes in work-life balance preferences or discussions about caring for grandchildren, future travel goals or alternate interests outside of work 

Planning for the Talk 

Instead of solely focusing on full retirement, acknowledge the growing trend of a phased retirement. This caters to individuals who may desire continued work, but with more flexibility or a shift in focus. 

Consider highlighting the value proposition for the employee to consider a different role within the organisation. Their experience can be invaluable in mentoring younger colleagues or taking on a consultant role or project-based work.  

Financial security is a major concern for many employees contemplating retirement. Explore the resources your organisation offers to help them plan for their future, such as retirement planning workshops, ageing well, or financial/superannuation advice. Additionally, investigate phased retirement programs – a growing trend – that allows them to gradually transition out of the workforce. 

Research by the Ageing Workforce Ready project suggests that flexible work arrangements can be beneficial for mental wellbeing, allowing older workers to maintain a healthy work-life balance while continuing to contribute their valuable expertise. Retiring can be a shock to the system for many workers who have worked for decades and have a strong work identity- even if they wanted to stop working. A poorly planned retirement can leave people feeling lost and without a purpose.  

For some individuals, retirement may not signify a complete disconnect from the organisation. Discuss the possibility of joining your alumni network which allows them to stay connected with former colleagues, contribute their expertise in an advisory role, or participate in mentorship programs for younger team members. 

Understanding the Benefits of Older Workers

  • Older workers bring a wealth of experience and knowledge accumulated over their careers. This can be invaluable for problem-solving, innovation, and mentoring younger colleagues.
  • Statistically, older workers tend to be more reliable and have lower turnover rates compared to younger generations. This translates to a more stable and predictable workforce.
  • Older employees often possess well-honed communication and interpersonal skills, leading to positive customer interactions. This can be particularly valuable in industries where trust and rapport are crucial.
  • An age-inclusive workforce fosters a more diverse talent pool. This leads to a richer pool of ideas, a wider range of perspectives, and a more representative customer understanding.

Conversation Starters  

Planning and Goals:

  • Do you have a general timeline in mind for retirement? (Open-ended question to gauge their current thinking)
  • Have you started thinking about your financial goals for retirement? (Opens the door for a discussion about support they might need)
  • Beyond finances, what are some things you’d like to achieve or experience in retirement? (Helps understand their broader vision)

Current Work Situation

  • Are there any aspects of your current role that you’d like to continue into retirement, perhaps in a modified form? (Identifies transferable skills or interests)
  • Would you be interested in exploring options for a phased retirement, such as transitioning to part-time work? (Gauges openness to flexible arrangements)
  • Is there any knowledge or expertise you’d like to pass on to colleagues before you retire? (Highlights their value and opens the door for knowledge transfer)

Communication and Support

  • Do you feel comfortable discussing your retirement plans with me openly? (Establishes clear communication)
  • Is there any information or support the company can provide to assist you in your retirement planning? (Offers support and demonstrates company commitment)
  • If you have any questions or concerns about transitioning to retirement, please feel free to bring them to my attention. (Opens the door for ongoing dialogue)

Remember: 

  • Maintain a positive and supportive tone throughout the conversation. 
  • Actively listen to their concerns and avoid making assumptions. 
  • Let the conversation flow organically, building trust and openness. 
  • Express your appreciation for their contributions to the team. 

The goal isn’t to force an immediate retirement, but to plant the seed and initiate a dialogue with your ageing workers. This conversation can be revisited in the future as their circumstances or perspectives change. 

Following the initial conversation, continue fostering open communication. Creating a supportive environment and facilitating a psychologically safe environment helps empower people to navigate their later career stages with confidence. Fostering a positive and respectful transition ensures older workers leave with a sense of accomplishment and a lasting connection to the organisation. 

Establishing a reputation as an employer that provides genuine and practical support to older workers can contribute to a healthy and engaged workforce. Workplaces that educate and encourage help-seeking behaviours by providing practical tools, resources and information can help those in the late career phase to successfully navigate this tricky life stage. 

To find out more about how Transitioning Well can help you older workers in your workplace, take a look at our retirement transition coaching and late career and retirement resources.

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