In 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.
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.