Working During Retirement

Have you considered working during retirement? For many retirees, working full or part-time for a portion of their retirement years can have financial and emotional benefits. Let’s take a closer look at how working during retirement could positively impact you, and how to determine whether it’s a good fit for your lifestyle.

The Financial Benefits

Working during retirement has one obvious financial benefit: you’re able to bring in more income. Additionally, you’re able to continue saving a portion of that income to improve cash flow later in retirement when you’re no longer able to work. Income from part or full-time work during retirement can help to offset medical costs and extend the life of your retirement savings.

Beyond Extra Income

In addition to receiving income to boost your retirement cash flow, there are a few other financial benefits that come with working during retirement:

1. You can delay taking Social Security. Delaying Social Security might mean receiving a larger monthly benefit later in life. Keep in mind that you can only delay Social Security until age 70.
2. You can save money on health insurance. Health care costs in retirement can be expensive. Between Medicare, and supplemental health care coverage, your monthly costs can add up quickly. When you receive health care through an employer for part or full-time work, your coverage rates are subsidized - which can be a huge cost saver in the long run.
3. You can bounce back if your portfolio has taken a hit in years before retirement. When it comes to investing, timing can be everything. Sometimes, retirement comes after a period of time when your portfolio has been underperforming. When you continue working during retirement, you’re able to take the time you may need to adjust your investing strategy and extend the life of your savings.

Emotional Benefits

There aren’t just financial benefits that come with working during retirement! Having a part or full-time job can have a positive emotional impact on your wellbeing, as well. Many retirees struggle with the transition from having a full-time career to being a full-time retiree.

It’s difficult to rethink your entire life and schedule. On top of that, a job or lifelong career often provides a sense of purpose and structure to your days. Having work during retirement can help you to:

1. Organize your schedule more clearly.
2. Maintain your current social circle (if you keep working at your current position), or start a new one (if you find a new, part-time job).
3. Stay mentally sharp, and physically fit.
4. Give your years as a retiree more structure and purpose.
5. Create an opportunity for yourself to try a new line of work, or pursue a second career.

Should You Work During Retirement?

Of course, working during retirement isn’t necessarily for everyone. Deciding whether it makes sense to you depends on both financial and emotional factors.

It’s also important to keep in mind that “working” during retirement doesn’t have to mean moving at your same pre-retirement pace - or even continuing to work in the same role or industry!

If you choose to work during retirement, you get to determine what type of job makes the most sense for your unique situation. This might mean continuing on at your current job, but it could also mean reducing to part-time hours in your current role, freelancing, leveraging contract work, or finding a part-time job that keeps you active without requiring as much energy as your pre-retirement career.

Are you thinking about pursuing work during retirement? Contact us today! We’d love to help you weigh the pros and cons of work during retirement, and create a financial plan that supports your goals.

Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs, and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.

"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.