With life expectancies rising all the time and over a quarter of current 65-year-olds in the US expected to live past the age of 90, retirement is a much larger chunk of your life than you might have expected.
The decision to continue working beyond retirement is being taken by more and more Americans for a number of reasons. These aren’t just financial concerns – they’re also related to emotional well-being and our sense of purpose.
Working after retirement can pay off in so many ways, so here are the seven most important ones.
1. Working After Retirement: The Money Question
The main motivation for going back to work after retirement is, unsurprisingly, financial. With an unbelievable 78% of Americans not saving enough for retirement, the workforce is only set to get greyer.
If you retire at 65 and live beyond 90, you’re essentially expected to live off of your savings for two or three decades. This is only sustainable if you have six figures saved away for retirement.
Most people don’t have this saved up, which is why even a small part-time job can be essential for maintaining a good standard of living in old age. Social security benefits are stretched thin enough as it is, so the need to be self-sufficient in old age is more important than ever before.
On average, senior citizens have much lower living expenses, so you won’t need to be clocking in 50 hours a week to stay afloat.
2. The Need for Health Insurance
One of the key concerns of those working in retirement is health insurance. Old age comes with plenty of annoying ailments we’d rather do without. This is why many prefer to work to keep access to comprehensive coverage like that provided by Medicare Advantage plans.
Coverage for elders doesn’t start until you reach the social security age of 65. If you retire before this age, you’ll want to consider working to retain access to coverage.
Even beyond this point, you’ll want an insurance plan which covers extra costs associated with old age. Working in retirement will allow you to make sure your prescription drug costs are all covered, and you’ll have one less thing to worry about.
3. Increase Your Social Security Benefits
Your social security benefits are your safety net. They’re your lifeline that will sustain you long after you’ve stopped working. In order to get the maximum benefits from your social security, you should delay them for as long as possible.
For every single year after you reach the eligible age that you delay your social security payments, your benefits will grow by an average of 8%. This means that if you were to continue work after retiring until the age of 70, your social security benefits would be a whopping 25% larger.
This means that if you’re healthy and able to work, you should do so for as long as possible. You’ll be grateful that you did so a few years down the line.
4. Find a Sense of Purpose
There are plenty of personal, emotional benefits to working after retirement too. Many retirees complain that suddenly stopping work robbed them of a much-needed sense of purpose.
Like it or not, our jobs form a huge part of who we are. If you’re fortunate enough to be doing a job that you love, then doing so for longer will keep you focused and happy. You should never underestimate the effect that boredom can have on our well-being.
Having something that gets you out of bed in the morning has been proven to help you live longer and to enjoy your golden years even more.
5. Keep Social
Our jobs form a huge part of our social network. Suddenly retiring can lead to an unexpected dip in your social life. It’s no secret that old age can bring loneliness, which is one of the leading causes of depression among older people.
Maintaining an active social life is crucial to our happiness. Working in retirement will allow you to keep your friends around you and ensure your days are filled with social interactions. Retirement is a dramatic life adjustment for most people, with one of the biggest adjustments being social.
If you don’t have a partner, then the benefits of working in retirement are even more prominent. Consider staying in a line of work that allows plenty of contact hours, both with co-workers and with the general public.
6. Boost Your Legacy
This is another financial benefit of going back to work after retirement. With old age approaching, a major concern will be the legacy that you leave for your loved ones.
If you dream of bequeathing a college fund or a safety net for your family members, then consider working a few extra years to achieve that. Working and saving through your older years will boost your inheritance, thereby boosting the opportunities you leave behind for your nearest and dearest.
Even saving just a few hundred dollars a month will greatly increase the amount you end up leaving for your family. Those closest to you are too important to neglect.
7. Embark on a New Adventure
While there are lots of practical benefits to working after retirement, at the end of the day it’s all about the journey. Life is short, and your retirement years shouldn’t be discounted as pointless.
Going into work after you retire is a great chance to embark on a totally new adventure. You could make new friends. You could decide to switch fields and learn new skills. You could find a job which allows you to experience totally new things that you haven’t done before.
The right job can be a lot of fun, so choose wisely and you might find that working after retirement is the best decision you ever made.
To learn more about working after retirement or the many other financial steps you should take as you approach your golden years, make sure to follow our accounting and finance section for all of the crucial tips you’ll need.