5 Reasons to Consider Working in Retirement
In the past, retirement has been portrayed as an ending, a grand exit from your years in the workplace. But the rules continue to shift. In 2022, labor force participation among those aged 65-74 is expected to reach about 32%, up from about 20% in 2002.1 As the Baby Boomer generation ages, more people view retirement as an opportunity to reduce their stress while enjoying the rewards of work in a whole new way. If you’re considering retiring soon, here are a few ways it could be beneficial to continue working in some capacity.
1: Continued Income & Delayed Social Security Benefits
Perhaps the most obvious reason to continue to work in retirement is the financial benefit. The longer you work, the longer you receive a steady paycheck. This reduces the amount you need to draw from your savings, boosting financial stability.
In addition, working during retirement may afford you the chance to delay receiving your Social Security retirement benefit. Social Security benefits become accessible as early as age 62 but increase each year up to age 70. (And a greater Social Security retirement benefit translates into more dollars for each annual cost-of-living adjustment.)
It is possible (and frequently advisable) to delay Social Security benefits even after you retire, but many people find this uncomfortable. They don’t like the idea that they will draw more from their investment accounts in the early retirement years, even if they understand intellectually that this provides a more secure future. If you feel this way, continuing to work in the first few years of retirement will not only help you reduce your retirement draws, it can help prevent you from falling prey to mistakes with Social Security.
2: Improve Your Mental Health
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 and maintain your mental faculties. This is widely believed to be an effective way to reduce the risk of developing dementia or Alzheimer’s and ward off signs of aging.
3: 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 help you keep your body moving. This can give you opportunities to stay balanced, strong, and healthy.
4: Sense of Purpose
Studies have shown that a sense of purpose has been found to lengthen lifespan and quality of life.2 Working on something you care about, starting a new business, or mentoring others can ward off depression and provide a healthy sense of fulfillment and direction in your later years.
5: Avoid Isolation
One risk associated with retirement is increased isolation, which has been linked with weakened physical health.3 Working with others reduces this risk, giving you a chance to build connections and enjoy meaningful interactions.
There’s a lot to consider before rejoining the workforce in retirement. These potential benefits can help you decide what’s right for you.
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