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Cash FlowShould You Have a Job During Retirement?

Should You Have a Job During Retirement?


Is it a good idea to keep working a job during your “retirement?” Here is what the experts say.

Many Americans find themselves returning to work soon after retiring from their life-long careers. For some, this isn’t a choice. Having been low-income earners throughout their lives or facing other financial challenges, they need to supplement their retirement income and retirement savings. Others choose to take on a job after reaching retirement age for several reasons. Working for even a modest income once your “retire” can delay the point where you have to access retirement assets such as IRAs or even your Social Security benefits. Still, others choose to work, not because they need to for any financial reason, but because they just need to “keep busy” and continue to feel they are doing something of value.

Either way, most financial experts agree that if you can work after 65 and wish to, there really is no reason not to. And it can go a long way to growing wealth and enjoying a more successful retirement when you really want to, or have to slow down.

Health experts say that maintaining social connections and staying physically active helps slow aging, and working part-time can help on both counts.

“Keeping moving is what keeps you from getting frail as you get older,” says Carolyn McClanahan, who is both a medical doctor and a financial advisor in Jacksonville, Fla. McClanahan recommends that all of her clients keep working in retirement if they can find something they enjoy.

If you’re retired or preparing to retire, here are the financial and health benefits that can come from continuing to work at some level.

Asset Preservation

Every dollar you earn in retirement is another dollar you don’t have to take from your investments. Even low-paying jobs can make a big difference in how long your savings last.

Delay SSI Benefits

The later you take your earned Social Security benefit (SSI), the more you will make each month. Let’s say you retire at age 62 and are due to collect $3,000 a month from Social Security at your full retirement age of 67. If you opt to start Social Security early at age 62, you would get 70% of that amount, or $2,100 a month. Now suppose you get a part-time job to replace that money. You work for eight years until you’re 70 years old and then start collecting Social Security. You will now get $3,720 a month for the rest of your life, 77% above the $2,100 you would have received at age 62 and 24% above the $3,000 at age 67.

Stay Connected and Socially Active

Research has shown that seniors who maintain strong social networks have better all-around health, including better brain function. Working part-time forces people to stay connected.

Stay Sharp

Similarly, the health experts say that going back to work, even part-time, after retiring is a great way to stay sharp and mentally focused. Such continued focus on work-related tasks can help stave off age-related memory loss or dementia.

What is your plan for retirement? Have you recently retired and gone back to work? Why? Can you share your decisions and experiences?

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