Should You Continue to Work During Retirement?

In the past, retirement has been portrayed as an ending, a grand exit from your years in the workplace. But the rules are shifting. Labor force participation among those aged 65-74 is predicted to reach 32% by 2022, up from just 20% in 2002.1

As the Baby Boomer generation ages, more people are viewing retirement as an opportunity to enjoy the rewards of work in a whole new way. Additionally, people are living much longer on average today than they did a few decades ago. If you’re considering working in retirement, here are a few reasons why it could be beneficial.

Reason #1: Improve Your Mental Health

Doing things like learning a new skill can help maintain mental agility. Working, especially in a new job, is a great way to continue learning and improving your skillset. Staying engaged in work helps to build your “mental muscle”, an effective way to reduce the risk of developing dementia or Alzheimers as well as ward off signs of aging.

Reason #2: Maintain Physical Health

Staying active during retirement years is crucial for continued health. Whether you choose to work full time or volunteer a few days a week, engaging in some form of work will keep your body moving. This can give you opportunities to stay balanced, strong, and healthy.

Reason #3: Continued Income & Delayed SS Benefits

The longer you work, the longer you receive a steady paycheck. This, of course, can help boost financial stability and grow your savings. Working longer can be a viable option for bolstering retirement savings for those who got a late start on saving for retirement.

For high-income earners, working during retirement may afford you the ability to delay receiving Social Security benefits. Social Security benefits become accessible at age 62, but full retirement benefits will only be available once an individual reaches their full retirement age, which is determined by their birth date. If you were born in or after 1960, your full retirement age is 67. Individuals born between 1955 and 1959 have a full retirement age between 66 and 67. Any benefits received before reaching your full retirement age are reduced by a percentage, also determined by birth date, ranging between 25 and 30%.2

Depending on your circumstances, working into retirement may mean being able to delay benefits until your full retirement age. If you want to maximize your benefits, you can receive a retirement credit up until the age of 70. This bonus percentage is determined by how long beyond your full retirement age you wait to begin receiving benefits.

Reason #4: Sense of Purpose

Studies have shown that a sense of purpose has been found to lengthen lifespan and quality of life.3 Working on something you care about, starting a new business, or mentoring others in the workplace can ward off depression and provide a healthy sense of fulfillment and direction in your later years.

Reason #5: Avoid Isolation

One of the risks associated with retirement is increased isolation, which in terms of its impact on your health, has been equated with smoking nearly a pack of cigarettes a day.4 Working with others reduces this risk, giving you a chance to build connections and enjoy meaningful interactions.

Should You Work During Retirement?

There are plenty of considerations to make before rejoining the workforce in retirement. Ultimately, the decision is up to you, your personal preferences, and your needs. When deciding if this is the right move for you, keep these important benefits in mind.

If you choose not to work during retirement, it’s essential that you have a plan for how to keep your mind and body active, as well as staying connected with your friends and family. You’ve worked for decades to reach this point; make sure you enjoy it!

If you’re worried about your ability to fund the retirement of your dreams, schedule time with our team of advisors to discuss.

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.