Compelling Reasons to Continue Working in Retirement

Retirement is often portrayed as an obligatory grand exit from many years in the workplace, often timed with achieving the milestone age of 65 and qualifying for Medicare. However, more people over age 60 are planning to continue working. In fact, labor force participation among those aged 65-74 is predicted to reach 32 percent by 2022, up from just 20 percent in 2002, and increasing faster than any other age group.

As the Baby Boomer generation ages and life spans extend toward 100, more people are viewing retirement as an opportunity to enjoy the rewards of work in a whole new way. We are starting to see these trends firsthand with our many client relationships at Charter Oak. So, if you’re considering working in retirement, below are a few reasons why it could be beneficial.

Reason #1: Improve Your Mental Health
Doing things like learning a new skill can help maintain mental agility. Working, especially in a new job, is a great way to continue learning and improving your skill set. Staying engaged in work helps to build your “mental muscle.” This is an effective way to reduce the risk of developing dementia or Alzheimer’s as well as ward off signs of aging.

Reason #2: Maintain Physical Health
Staying active during retirement years is crucial for continued health. Whether you choose to work full time or volunteer a few days a week, engaging in some form of work will keep your body moving. This can give you opportunities to stay balanced, strong and healthy.

Reason #3: Continued Income & Delayed Social Security Benefits
The longer you work, the longer you receive a steady paycheck. This, of course, can help boost financial stability and grow your savings. In addition, working during retirement may afford you the ability to delay receiving Social Security benefits.

Social Security benefits become accessible at age 62, but full retirement benefits will only be available once an individual reaches their full retirement age, which is determined by birth year. Any benefits received before reaching your full retirement age are reduced by a percentage, also determined by birth year, ranging between 25 and 30 percent.

Depending on your circumstances, working into retirement may mean being able to delay benefits until your full retirement age. And if you want to maximize your benefits, you can receive a retirement credit up until the age of 70. This bonus percentage is determined by how long beyond your full retirement age you wait to begin receiving benefits.

Reason #4: Sense of Purpose
Studies have shown that a sense of purpose has been found to lengthen lifespan and quality of life. Working on something you care about, starting a new business or mentoring others in the workplace can ward off depression and provide a healthy sense of fulfillment and direction in your later years.

Reason #5: Avoid Isolation
One of the risks associated with retirement is increased isolation, which in terms of its impact on your health, has been equated with smoking nearly a pack of cigarettes a day. Working with others reduces this risk, giving you a chance to build connections and enjoy meaningful interactions.

There are plenty of considerations to make before retiring or rejoining the workforce in retirement. Deeper conversations with your Charter Oak Advisor(s) are always beneficial when deciding if this is the right move for you – financially and emotionally. In the meantime, we hope these important benefits are helpful to keep in mind. It is a pleasure and privilege to serve you, and we hope you enjoy the remaining days of winter 2022 (as of this writing spring is just one month away).