Phased retirement is a flexible transition that allows you to gradually reduce work hours rather than stop altogether, giving you control over when and how you retire.
13 November, 2025
Choosing a phased retirement
First Financial Team
We’ve been discussing the options of a phased retirement with many of our clients over the past few years. The primary reason is that retirement is no longer what it used to be. Instead of abruptly leaving work at 65, many Australians now choose a gradual transition.
This “phased retirement” approach is especially popular among pre-retirees and high-net-worth individuals, and it’s becoming increasingly common. Surveys indicate that about two-thirds of Australians plan to continue working in some capacity after reaching retirement age, rather than stopping work altogether.
What is the motivation for this shift?
For many, the biggest motivation for phased retirement is financial. Working a bit longer means you can keep some money coming in and delay tapping into your superannuation or investments. That gives your nest egg more time to grow, reducing the chance you’ll outlive your savings.
Higher living costs and uncertainty about future expenses also play a part. If you’re worried that you haven’t saved enough, easing into retirement can offer peace of mind. It’s a chance to top up your savings and protect against economic fluctuations. Even well-off individuals see advantages: continuing to work in some capacity allows them to manage their wealth carefully and achieve lifestyle or legacy goals without rushing to stop work entirely. In short, a gradual retirement can significantly improve your financial confidence for the future.
Another reason Australians opt for a phased retirement is to preserve their lifestyle and sense of purpose. Work isn’t always just about the paycheque. It provides routine, social connection and a sense of accomplishment. Many people in their 60s simply aren’t ready to lose that overnight. By cutting back hours instead of leaving work with a complete stop, many individuals find that they stay mentally and socially active, which makes for a smoother and happier transition into retirement. It helps avoid the sudden void some feel when they stop work all at once and miss the daily challenge and camaraderie.
In fact, many older Australians who keep working say they do it because they enjoy it and value the interactions. Phased retirement lets you keep the parts of your job you love, but with more time to relax or explore other interests than you had in your full-time career.
“Phased retirement enables you to design a retirement lifestyle that suits you, rather than one dictated by a calendar date.”
Flexibility and control
We are seeing many clients who are choosing a phased retirement because it lets them call the shots on how and when they retire. Instead of being forced out at a fixed age, you set your own timeline. You can gradually scale back work on your terms, tailoring your exit to suit your plans.
This flexibility allows you to test the waters of retirement before making a full commitment. For example, you might start by dropping one or two workdays to see how you enjoy the extra free time, then adjust further when you’re ready. This step-by-step transition helps you avoid the shock of going from full-time work to a complete stop overnight. Many people appreciate being able to wind down at their own pace while still staying involved in their field and maintaining a healthy work–life balance. In short, phased retirement enables you to design a retirement lifestyle that suits you, rather than one dictated by a calendar date.
Talk to a retirement planning expert
A phased retirement offers many benefits, but it also needs careful planning. Because everyone’s situation is unique, getting expert advice can make all the difference. At First Financial, we specialise in retirement planning and can help tailor a strategy to your needs and goals.
With a personalised plan, you can approach phased retirement with confidence that your finances and lifestyle are in balance. Our experienced advisers guide you through key decisions around superannuation, investments and tax-effective strategies to ensure you get the best of both worlds: more freedom and financial security.
If you’re considering easing into retirement, contact First Financial to discuss how we can help you make the most of this well-earned chapter of your life.
“Phased retirement enables you to design a retirement lifestyle that suits you, rather than one dictated by a calendar date.”
Financial planning and retirement experts
A phased retirement offers many advantages, financial and social; however, it does require guidance to ensure it is worth the effort and meets your objectives. The team at First Financial have the expertise and experience to help guide you and ensure you have all the necessary information to make an informed and balanced decision. Don’t hesitate to get in contact with us for strategic and tailored financial advice.
Read more retirement planning articles.
Key Takeaways
It strengthens financial security by keeping income flowing longer, delaying superannuation withdrawals and allowing your investments more time to grow.
Lifestyle and wellbeing benefits include maintaining social connections, purpose and routine—helping to ease the emotional shift into retirement.
Expert guidance is essential to ensure your phased retirement plan aligns with your personal goals. First Financial’s advisers can tailor a strategy that balances freedom, income and long-term financial confidence.
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When Tim received an overseas medical settlement, he and Adam had just 14 days left in a 90-day window. They needed clear guidance, fast. A referral led them to First Financial.
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“I feel genuinely supported by First Financial. I can ask anything, and there’s no pressure, just clear advice and real care. The money’s growing, I’m not stressed about it, and I feel completely at ease for the first time. I don’t miss work, but I’d miss the support I get from First Financial.”
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Frequently Asked Questions
What is a phased retirement?
A phased retirement is a gradual approach to leaving the workforce, rather than stopping work completely at a set age. Instead of retiring abruptly, you reduce your working hours or responsibilities over time. This allows you to ease into retirement, maintain some income and stay active socially and mentally while testing what retirement life might look like.
Why are more Australians choosing a phased retirement?
Many Australians are opting for phased retirement because it offers financial security and flexibility. Working part-time for longer means you can delay accessing your superannuation, helping your savings last longer. It also allows people to remain socially connected and engaged, keeping a sense of purpose and structure in their daily lives.
How can phased retirement improve financial confidence?
By continuing to earn an income while drawing less from your savings, you give your investments more time to grow and mature. This approach can help mitigate the risk of financial strain later in life and provide a buffer against unexpected expenses. It’s a financially savvy way to extend your working years without giving up the benefits of more personal time.
What lifestyle benefits come from easing into retirement?
A phased retirement allows you to keep the best parts of your job—social contact, routine and achievement—while gaining the freedom to explore hobbies, travel or spend time with family. It creates a balanced transition, helping avoid the sudden loss of identity or purpose that some people feel when they stop working abruptly.
How can First Financial help me plan a phased retirement?
First Financial can create a tailored strategy that aligns your financial goals with your lifestyle aspirations. Their advisers help you manage superannuation, investments and tax-effective options to ensure your income continues smoothly throughout your transition. With expert advice, you can enjoy both flexibility and financial security as you move into retirement.
What makes First Financial’s approach unique?
The team at First Financial takes a holistic approach to phased retirement planning. They focus not just on your money, but on how your lifestyle will evolve. Their experienced advisers work closely with you to model different scenarios, ensuring your chosen path supports your goals—whether that’s working part-time, pursuing passions, or simply enjoying more freedom.