Financial planning tools and services to put you on the path to the future you want
Your guide to financial planning and retirement
Connect with peers and experts
Get to know the people behind the company and the mission behind the work
Digital financial planning and guidance at scale
March 5, 2020
Forget early retirement. The trends all point toward working well after the traditional retirement age of 65 – reversing earlier tendencies toward quitting work by age 62 or before. In fact, an AARP study reported that almost half of their respondents planned to have a retirement job and be a working senior into their 70s or beyond.
The financial reasons for working after retirement are significant. But, many people also find jobs in retirement to be a source of fun and vitality. Retirement jobs don’t need to be grueling or stressful. Think about finding work that you enjoy.Here are 14 varied and wonderful reasons to have a retirement job:
It is important to understand that today’s retirees have a very good chance of living a long time – to 85 or longer.
Retiring at 65 means that you could be out of work and living off your savings for 20 years or more.
Twenty years without work requires a lot of retirement assets and a lot of good hobbies.
The most fundamental financial consideration of having a full- or part-time retirement job is that you are earning money. Working in retirement could enable you to continue saving money and therefore better your quality of life once you do stop working. Studies show that less than 50 percent of retirement-age-households actually have adequate savings to maintain their quality of life in retirement.
It is likely that you will need the extra money. If you are unsure if you have enough or not, use the NewRetirement Retirement Planner to find out how long your savings will last in retirement.
In addition to adding to your retirement assets, retirement jobs might also mean that you won’t need to draw down your existing savings.
You can retain your existing savings – enabling those assets to continue earning interest – while living off income from your retirement job. By delaying the use of your retirement assets you will be able to live more comfortably for a longer period of time in retirement.
Social security benefits are based on your top 35 earning years. Depending on your work history, working past the traditional retirement age could have a significant impact on your Social Security benefit payments.
By working longer, you could insure a bigger monthly Social Security check. And, working full or part time after retirement does not impact receiving your benefits after you have reached your “Full Retirement Age” as defined by the Social Security Administration. You can claim full Social Security benefits after you have reached your “Full Retirement Age” and still work full time.
You might also want to consider working full or part time as a way to delay the start of Social Security benefits. The longer you delay the start of Social Security up until the age of 70, the bigger your monthly Social Security check will be. Review the Maximum-Taxable Earnings table to see how your Social Security benefits might increase with additional years in work.
Many retirees are not prepared for the high cost of medical care they’ll face in retirement when they are no longer part of a company plan. Too many people believe that Medicare covers most or all expenses. The reality is that Medicare only covers a percentage of some of your medical bills. Working after retirement can positively impact your medical benefits. If your employer offers medical benefits, those benefits may be better than what you receive from Medicare and the Medicare supplemental insurance programs.
Medicare Part A and Part B are plans that almost all retirees can and should participate in. Your ability to purchase and/or qualify for most additional or medicare supplemental insurance – including employer plans – is dependent on your enrollment in Medicare part A and part B. However, discuss your health care options carefully with someone knowledgeable of the system and your circumstances.
Each situation will be unique. Medical benefits from a retirement job are particularly important if you have taken early retirement. If you retired before the age of 65, you are not yet eligible for Medicare and private insurance can be prohibitively expensive for seniors.
Confucius said, “Choose a work that you love and you won’t have to work another day.”
For people who love their jobs, working in retirement is the ultimate pleasure.
Yes, work can be a source of stress. But, studies show that around half of all Americans actually enjoy their job. And, it is important to be aware that depression after retirement is a common problem. If you have invested a lot into your career and identify strongly with your work, you may be at risk for depression after retirement. Before retiring, consider these types of questions:
More men than women experience depression after retirement. Studies have shown that the self worth and identity of men have much to do with their careers. Having invested so much into their careers, executives seem to have the most significant problems adjusting to retirement. Men also seem to have a more difficult time making friends and finding things to do after retirement. When considering retirement – be careful what you wish for and be sure to consider how you really feel about your work.
Economists are not entirely sure of the actual effects baby boomer retirement will have on the U.S. economy. However, the idea of 76 million baby boomers entering retirement is cause for alarm.
Employers may need baby boomers to continue working. If baby boomers retire at or before the age of 65, the United States may experience huge labor shortages – hurting the economy. Alan Greenspan the former Federal Reserve chairman seems to support senior work. He is quoted as saying, “Policies promoting longer working life could ameliorate some of the potential demographic stresses.”
Furthermore, it will be interesting to watch what happens to economic growth in the United States as the baby boomer generation transitions from accumulators of wealth (working) to spenders of assets (retired).
The International Longevity Center funded a survey showing that the majority of Americans think that chronological age has nothing to do with “old age.” Only 14 percent of those surveyed indicated that reaching a specific age indicated that they were old. The majority said that overall health was the important factor.
If your health is good at “retirement age” you might consider not retiring. There is no real need for the rest and relaxation that retirement allows.
Working after retirement does not mean that you must stay at your current job or continue working full time.
Many retirees are retraining and pursuing careers that they really love. These working retirees may not earn as much money as they did in their lifelong careers, but they enjoy the work or the flexibility of their new jobs. Think about jobs that involve something related to your real passions in life. You can also choose a part time retirement job. You can work from home. Your options are really endless.
Click here for more information about the best jobs for retirees.
Maybe you don’t like “work” exactly, but many people find when they retire that they really miss the social aspects of work. Having a place to go and people to see everyday is very important to the happiness of many people.
Meeting with colleagues, interacting in a retail environment or making calls are great activities for people who are outgoing and enjoy communications and socialization.
Use it or lose it is what they say about your mental capacity as you age. Crossword puzzles or a good book may provide the stimulus you need to stay mentally fit, but working is also an excellent way to stay engaged. Almost all work requires you to think and problem solve.
Boredom is a common complaint among retirees.
Boredom can also lead to depression and mental and physical decay. Before retiring completely, be sure you have an idea of what you would like to be doing and a plan for how you are going to do it.
As Abe Lemmons said, “The trouble with retirement is that you never get a day off.” Some people really need a retirement job to give them a rest from all that rest and relaxation.
Retirement can force you to evaluate the very fundamental question of the purpose of life. When faced with the prospect of wide open days with nowhere to go, retirees must confront what to do and why. For some people, their existing work is their real purpose – they derive great pleasure and satisfaction from work and yet they don’t realize it until after they retire. Other people find that transitioning to a new career gives them the most satisfaction. Other people will want to pursue leisure, time with family or the arts.
By evaluating your values, you can come up with a plan for spending the last phases of your life in a way that is meaningful to you.
Most households simply have not planned sufficiently for retirement.
You may have enough assets and retirement income to cover the basics, but are you sure that you have planned adequately for inflation, rising medical costs, long term care, and how long you are actually going to live? These variables can have a profound impact on how long your money will last in retirement. Retirement jobs can provide additional assets to cover the financial uncertainties caused by these variables.
Do you know how long your money will last in retirement? The NewRetirement Planner helps you find out. You can figure out where you stand now and the tool enables you to discover ways you can improve your financial situation.
Do it yourself retirement planning: easy, comprehensive, reliable
Take financial wellness into your own hands and do it yourself retirement planning: easy,
Share this post:
Our weekly newsletter full of inspiration, podcasts, trends and news.
© 2022 NewRetirement, Inc. All rights reserved.
Disclaimer: The content, calculators, and tools on NewRetirement.com are for informational and educational purposes
only and are not investment advice. They apply financial concepts in a general manner and include
hypotheticals based on information you provide. For retirement planning, you should consider other
assets, income, and investments such as equity in a home or savings accounts in addition to your
retirement savings in an IRA or qualified plan such as a 401(k). Among other things, NewRetirement
provides you with a way to estimate your future retirement income needs and assess the impact of
different scenarios on retirement income. NewRetirement Planner and PlannerPlus are tools that
individuals can use on their own behalf to help think through their future plans, but should not be
acted upon as a complete financial plan. We strongly recommend that you seek the advice of a financial
services professional who has a fiduciary relationship with you before making any type of investment or
significant financial decision. NewRetirement strives to keep its information and tools accurate and up
to date. The information presented is based on objective analysis, but it may not be the same that you
find on a particular financial institution, service provider or specific product's site. All content,
tools, financial products, calculations, estimates, forecasts, comparison shopping products and services
are presented without warranty.