With the elimination of a mandatory faculty retirement age, schools are turning to incentives to encourage faculty to retire when they approach traditional retirement age. One of these incentives is phased retirement, where faculty are usually freed from committee work and teach a reduced course load for a specified number of years before retiring fully. This type of program saves money by allowing institutions to hire younger faculty who usually draw smaller salaries than more experienced professors.

According to P. Brett Hammond, co-author of To Retire or Not? Retirement Policy and Practice in Higher Education and director of corporate projects at TIAA-CREF, approximately 70% of colleges and universities in the United States have some sort of retirement incentive program. Half of those that use retirement incentives offer phased retirement.