Employers take a hard look at phased retirement option.

The nature of retirement is changing.

Confronted with a tight labor market and a booming economy, some companies are looking into phased retirement programs that allow their older workers to ease their way into retirement gradually, rather than jumping into it all at once.

Companies take different approaches when it comes to phased retirement programs.

Some employees scale back their hours and only work a few days a week, while others officially retire and then are rehired as consultants.

"This is a relatively new concept, and not all industries are equally focused on it yet," says Bill Partridge, a retirement practice leader in Houston for Bethesda, Md.-based Watson Wyatt Worldwide, management con suiting firm that held a seminar in Houston on the topic in November, "There's not just one approach to phased retirement. Each company looks at it in a different way."

Watson Wyatt defines phased retirement as "any arrangement that enables employees approaching normal retirement age to reduce their work hours and job responsibilities for the purpose of gradually easing, into full …