8 Perks of Working During Retirement

Retirement age man with drill

Retirement can spark fantasies of globetrotting around the world by plane or cruise ship, lapsing into endless days of leisure, or finally having the time to pursue that long-cast-aside hobby.

But these days, it turns out that those reaching retirement age might actually want to continue working. According to a recent Harris Poll study conducted on behalf of Express Employment Professionals, 72 percent of those surveyed would like to semi-retire by working a more flexible schedule, while 58 percent would like transition into semi-retirement by working reduced hours.

As you can see, a more realistic — and potentially fulfilling — alternative to full-blown retirement might be to work part-time. Whether you’re working for the extra money or because you love your job and would like to continue working, the perks are many:

Boosts Your Retirement Income

One of the financial advantages of working during your retirement years is that it will bring in cash. You might be able to enjoy a higher standard of living. Maybe you can travel more than anticipated. Or you could just make that money stretch further so you won’t be stressing about running low on your current retirement savings.

More Time for Your Investments to Grow

If you have a boost in income from working, you might be able to let the money sit in your retirement accounts and other investments, explains Stephanie Bacak, a CFP® of Capstone Global Advisors.

In turn, that will give your money more time to grow, and you’ll have a larger chunk when it comes time to take out that money. Of course, that depends on your specific investments and timeframe. You’ll want to talk to a financial advisor for advice that pertains specifically to your situation.

The income can help extend the retirement portfolio, allowing investors to spend a little more freely in retirement — especially in the go-go years of retirement — and can give their financial plan a chance to work, says Michael T. Johnson JD, CFP® and wealth advisor and founder of Flagstone Financial Management.

You Could Hop on Group Health Insurance

If your employer offers group insurance, you could save money by hopping on the company’s health insurance plan, rather than an individual policy, says Bacak.

If you’re 65 or older, and you’ve paid enough in Medicare taxes while you were working, you could be eligible for Medicare Part A.

Medicare outlines some specific rules defining which party will be your primary payer with medical expenses — whether it’s Medicare or your employer’s insurance depends on a number of things.

Offers New Challenges

A downside of retirement is that one might find themselves feeling idle or bored. When you work, you are faced with a host of new exciting challenges, which might include finding creative solutions to problems, and getting your head around fresh concepts. If you’re considering starting a new side business or endeavoring in side hustle, you can use your semi-retirement to pick up new skills and launch a fresh product or service.

Keeps You Mentally Stimulated

Alex Mathers, a digital illustrator, freelancing coach, and podcast host, says it best: Don’t follow your passions, follow your potential. Being able to spend your free time exploring your passions and hobbies is definitely a well-deserved privilege, but it could also push you to learn new skills and expand your intellectual horizons.

Expands Your Social Network

It can be hard to make new friends as you get older. In fact, research from the Stanford Center for Longevity shows that Baby Boomers tend to disengage from traditional modes of social engagement. Outside of meeting folks through senior centers and volunteering opportunities, it might be hard to forge new friendships. Working offers a gateway to meet people you otherwise wouldn’t meet.

Health Benefits

It’s true: Working can make you more healthy. According to a study by the Journal of Epidemiology and Community Health, even working a year past retirement age was linked to anywhere from a 9 percent to 11 percent lower risk of dying. Other studies suggested that working during retirement years could potentially lower the risk of heart disease and Alzheimer’s.

Of course, if you’re suffering from long-term burnout and stress, or work in a mentally or physically exhausting job, then scaling back on your work might be a healthier course of action. Again, it really depends on your situation and your personal needs and preferences.

Enjoy Greater Flexibility

If you’ve worked in a single industry for your entire career and have decades of experience under their belt, you might be able to command a more flexible schedule. You could also try transitioning into an independent consulting role.

And when you have more flexibility with your work, you could fit in time to pursue a new hobby, for travel, and to spend time with your loved ones.

When working in your retirement years, you’ll also want to consider the tax implications, and how it could potentially affect your healthcare and Social Security benefits.

No matter how near (or far) retirement may seem for you, Money Management International (MMI) can help. We can assess your current and future financial needs, and help you come up with a spending plan.

Tagged in Retirement, Earning extra income, Navigating change, Seniors

A corporate headshot of Jackie Lam.

Jackie Lam is an L.A.-based personal finance writer who is passionate about helping creatives with their finances. Her work has appeared in Forbes, Mental Floss, Business Insider, and Bankrate. She's also a 2022 Financial Literacy and Education in Communities (FLEC) award winner. You can find her at heyfreelancer.com.

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