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4 Benefits of Working in Retirement

Retirement is right around the corner. Are you ready to put your working days behind you?

Key Takeaways

  • Working past 65 leads to a lower risk of death from all causes.
  • You can work part-time rather than a full-time position so you don’t lose your newfound flexibility.
  • The increase in cash flow has a number of benefits, such as delaying when you cash in on Social Security.

Maybe not.

In 2016, 18.6% of Americans 65 and older said they were employed, according to the U.S. Bureau of Labor Statistics. That number dips only slightly to 12% for those 70 and older.

This emerging trend could be a result of Americans coming up short on their retirement savings, forcing them to remain at work. However, there are other reasons why Americans continue to work (whether full-time or part-time) during their retirement years.

Here are the advantages of remaining in the workforce for some of your golden years.

1. Benefits to your health

Is there another reason to continue going to work besides the income? Yes — your health.

A 2016 study conducted by Oregon State University found that working past 65 leads to a longer life. Those who remained at work for even one year past 65 had an 11% lower risk of death from all causes. The study also found that those who described themselves as unhealthy had a better chance of living longer if they remained in the workforce.

Furthermore, the social interactions of being in a work environment are beneficial, as is keeping up with tasks and other responsibilities of your work, according to The New York Times.

Be sure to consider the physical requirements of the job, as some might have negative implications on your health as you grow older.

2. Work on your terms

One of the great perks of retirement is the freedom it affords those who spent the majority of their life with deadlines and obligations. Choosing to work in retirement doesn’t have to hinder that newfound flexibility.

Apply for a part-time job if you don’t want to feel too tied-down by your work. That allows you to still accomplish your retirement goals, whether you want to travel, attend all of your grandkids’ extracurricular activities, or any other hobby.

Perhaps you’re passionate about your work and don’t want to give it up. In that case, it might make more sense to keep your full-time job (assuming your health allows you to) or explore the possibility of remaining on the team in a part-time role. That way you maintain the sense of fulfillment your job provides.

You could also turn a job into a way to fuel your retirement goals. If you’re passionate about photography, reach out to local media organizations about freelance assignments. If gardening is your forte, try applying to local flower shops and use potential employee discounts to grow your garden. You could even work remotely (if your job allows for it), which could fit into your goals of traveling or being close to family.

3. Stay on your employer’s health insurance

Healthcare can be a large expense in retirement. By remaining in the workforce, your employer’s health insurance might be a better option than Medicare, because of cost or coverage.

Speak with your employer to learn how your health insurance impacts your Medicare enrollment.

4. Better cash flow

You’ve saved your entire working life with the idea that your nest egg will last you for the rest of your life. But are you sure that will happen? Picking up a part-time job or remaining at your full-time job past retirement age adds a source of income to supplement your nest egg.

There are a number of perks to doing this. The first is fairly obvious: adding is better than subtracting. Continuing to build your retirement asset vehicles (401(k), IRA, etc.) can put you in better financial standing during your golden years, especially if your employer matches your contributions.

Second, you can delay cashing in on Social Security. You are eligible to receive reduced benefits at 62 and full benefits at your “full retirement age” (either age 66 or 67 depending on the year you were born). The income from your part- or full-time job could be enough to let you wait until you’re eligible for full benefits, or — if you defer beyond your full retirement age — your benefits start to increase. Your benefit can increase by 8% each year you defer, up until age 70.

The bottom line

The decision to work (or not work) in retirement comes down to one thing: your goals. Does a part-time job fit in with how you want to spend your golden years? Do you find fulfillment and a sense of purpose through work or would you rather have all of your time to yourself? Ask yourself these types of questions before you make the decision.

More information

Everyone has their own expectations and goals for their retirement. To learn how to get the most out of your retirement, schedule a Citizens Retirement Checkup at your nearest Citizens Bank branch.

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