How to use the phased retirement pay calculator
Enter your full-time salary and weekly hours, the hours you would work in the first phased year, the further cut each year and how long the phase runs. The calculator shows pro-rata pay year by year, the total over the phase and the average reduction against staying full time.
Legal basis (as of September 2026) — The United States has no salary peak statute. The Age Discrimination in Employment Act (29 U.S.C. 621 and following) protects workers aged 40 and over, so a pay cut imposed because of age, rather than because hours or duties were reduced, can expose an employer to a claim. Waivers of age claims must satisfy the Older Workers Benefit Protection Act (29 U.S.C. 626(f)), which generally requires 21 days to consider an agreement, 45 days in a group program, and 7 days to revoke after signing.
Korea runs the opposite model, where employers that extend the retirement age often cut pay in the final years under a collectively agreed salary peak schedule. Recreating that here would mean reducing pay on the basis of age, which is exactly the structure the ADEA targets, so the calculation above is driven by hours instead.
This calculator is for reference only and is not legal advice. Pension accrual, health coverage eligibility and retirement plan contributions can all change when hours drop, so consult a licensed employment attorney and your benefits administrator before agreeing to a phased schedule.
Frequently asked questions
There is no United States equivalent. Cutting an older worker's pay because of age raises a claim under the Age Discrimination in Employment Act (29 U.S.C. 621 and following), which protects workers aged 40 and over. Phased retirement instead ties the lower pay to fewer hours or reduced duties.
The common approach is pro rata: if weekly hours drop from 40 to 24, pay drops to 60 percent of the full-time salary. Documenting the schedule change, not the employee's age, as the reason for the lower pay is what keeps the arrangement defensible.
Waivers of age claims must meet the Older Workers Benefit Protection Act (29 U.S.C. 626(f)), which generally requires a written agreement, at least 21 days to consider it (45 days in a group program) and 7 days to revoke after signing.