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Retirement of an Employee Definition

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Retirement is the point in time when an employee chooses to leave his or her employment permanently. Retirement generally coincides with the employee's eligibility to collect retirement resources such as Social Security, a company pension, or distributions from a 401(k) or another retirement plan.

Eligibility for public and private retirement resources varies from country to country as does the retirement age. In the US, the retirement age is gradually increasing, sitting at age 67 now for receipt of full benefits, for employees born in 1960 and later.

An employee may choose retirement for reasons other than the wish to stop working. Employees may suffer ill health or debilitating physical problems that require retirement. Family problems and responsibilities may require retirement. An employer may require employees to take early retirement in order to cut costs and preserve the business. Whatever the reason, retirement from employment marks the start of the next chapter of an employee's life.

Employees choose diverse methods of retirement. They may leave employment completely or start a second career or part-time work while retired. They may semi-retire or pursue phased retirement during which they gradually decrease the number of hours worked.

With sufficient financial resources, the employee may decide to pursue interests other than work and career in retirement.

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