Why “ Working Retirements ” Are a Growing Trend


working retirementsIn the past, retirement meant the beginning of a life of leisure. Retirees were free to spend their time pursuing hobbies, spending time with family and friends and doing everything that they didn’t have time to do while they were working.

These days, though, retirement doesn’t always mean slowing down and enjoying the results of decades of hard work. In fact, according to a new study by Age Wave, a think tank devoted to issues related to aging sponsored by Bank of America Merrill Lynch, the majority of retirees want or plan to work even after they technically retire. 

According to the survey, only about 28 percent of the retirees surveyed have no plans to work again after they retire. The remaining 72 percent plan to work in some capacity; most plan to work either part time or rotate periods of part time work with time off. Only about 5 percent plan to work full time after retirement.

What’s behind this considerable shift in the definition of retirement?

Working Keeps You Young 

With all of the headlines and financial experts warning that most people don’t have enough money saved for retirement, and that no one should rely on Social Security to meet all of their needs during retirement, the most obvious explanation for the desire to work is that seniors need to money to cover their expenses.

In some cases, this is true. Some older Americans have to work to make ends meet. However, what’s interesting about the results of the Age Wave study is that most of the respondents noted that they don’t have to work. Their good financial decisions during their working years allowed them to build a foundation of wealth; so they can work because they want to, not because they have to.

In fact, personal fulfillment was one of the most common reasons that survey respondents gave for their desire to work after retirement. Many people noted that work energizes them and gives them purpose; because work was such an important part of their identities, they are reluctant to move on. The desire to do something different was another common reason for retirees looking to stay in the workforce. For many retirees — both those nearing retirement and already retired — retirement presents an opportunity to explore passions or interests that they did not have time for when they were working. 

working retirementsThings to Consider

Many retirees choose to take a few years off between their retirement date and going back to work full time. Some experts call this a “career intermission,” as it’s a chance to take a breather, reflect and explore options for going forward. 

However, experts caution that taking an “intermission” can make it harder to re-enter the workforce later on. Getting another job can take longer when you are over age 60, as many employers are reluctant to hire older workers. 

For this reason, many retirees opt to become consultants or entrepreneurs in their post-retirement years, a move that some financial experts recommend as it can create a significant passive income stream going forward. 

If those options do not work, experts recommend volunteering or taking classes to keep your skills fresh and relevant, or perhaps working with your current employer to develop new opportunities that will keep you challenged and involved. 

Finding a job is not the only issue to consider post-retirement. Retirees who wish to return to work should also consider:

  • Health. While more than 80 percent of working retirees note that working helps them feel younger, there’s no getting around the fact that as we age, we cannot handle the same stresses as during our early career. It’s important to consider the effect that working will have on your health, and avoid taking on roles that will increase stress or negate the effects of retirement.
  • Social Security. Working after you reach full retirement age (70) will not have any effect on your Social Security benefits, but working between ages 62-69 will affect how much you collect each month. Depending on your age, you will have limits on how much you can earn before your benefits are reduced. If you amassed enough wealth during your working years to cover your expenses completely, this benefit reduction will not affect you, but it can be detrimental if you’re relying on Social Security to cover a significant portion of your expenses.

For many retirees, the ideal senior lifestyle balances work with leisure, and offers the chance to explore passions and interests. Even if you don’t have to, consider keeping one foot in the working world to continue building your wealth and keep your mind and skills sharp.

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10 Responses to Why “ Working Retirements ” Are a Growing Trend

  1. maria@moneyprinciple 08/23/2014 at 12:09 pm #

    Yeah, working does keep you young and active: body, soul and mind. It is not a great situation to be when you have to work because you can’t make end meet with your retirement income (which is more often the case). I think that people should work in retirement because they choose to, not because they have to (and this means that they should plan carefully their income streams for older age).

  2. Lance @ Healthy Wealthy Income 08/22/2014 at 3:05 pm #

    Some of my best employees are re-enters, but man are they behind on technology. It takes way longer to train but their work habits are amazing. On-time, dedicated, and always ask for PTO way ahead of time.

    I’d love to be fully retired and early, that is the initial goal, but I want to be useful and keep up my skills. But if I’m happy and work a few hours at Home Depot putting together BBQ’s or wheelbarrows just to get out of the house that is cool. But I hope I never get bored of golf!

  3. Untemplater 08/18/2014 at 11:20 pm #

    Right now I think that I would enjoy working part time in my retirement, but I wonder if I will still feel that way later on in life. 🙂 In any case, I think it’s good to stay active both mentally and physically.

  4. Traci 08/18/2014 at 8:01 pm #

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  5. Jayson @ Monster Piggy Bank 08/18/2014 at 5:24 am #

    I advised my Mom who would retire in 2 years time that she really needs to find something to keep her busy and active like a part-time job or join health clubs. Research says that after retirement people tend to get ill more easily.

    • Paul 08/19/2014 at 6:23 am #

      I believe that is why many people work past retirement age Jason. It is difficult to make that adjustment and say goodbye to people you’ve know for such a long time.

      • Jayson @ Monster Piggy Bank 09/03/2014 at 5:02 am #

        I agree with you Paul. And I just read that those people who still work past retirement age are like millionaires-in-the-making! They keep working because they only love working.

  6. Little House 08/04/2014 at 10:58 am #

    I can’t see myself not occupied in some kind of hobby or side-job when I ‘retire’. I’m thinking I’ll have a side hobby that brings in a little income (probably selling lesson plans on TPT like I do now 😉 ), but still have the freedom to make my own hours. Who knows, maybe I’ll even sell little shed-like houses. Sitting around without a purpose would drive me insane!

    • Paul 08/05/2014 at 8:46 am #

      I’m with you on that! I would have to be doing something, even if it is only part-time. Staying active is key to maintaining good health in retirement.

  7. Kate @ Money Propeller 07/31/2014 at 6:37 pm #

    Sometimes health are neglected, especially if you are young, you think that you can still do everything because you are still in your 20’s or 30’s. Like me, I just discovered that I have a problem with health and I don’t want to take my maintenance medicines until I reach my retirement age. So, as early as now we should start to have a healthy lifestyle.

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