It's easy to think of retirement as a period of life when work is off the table. But these days, a growing number of workers are planning to hold down some type of job once their primary careers come to a close.
A good 57% of workers today said they'll earn money in some capacity once they retire, according to the 21st Annual Transamerica Retirement Survey. And Gen Xers and millennials are more likely than other age groups to plan to work during their senior years.
If you're not planning to have a job in retirement, you may want to rethink that plan. Here's why.
1. Your savings might need a boost
Transamerica reports that the median retirement savings balance among all workers today is $93,000. Now to be clear, that's not a small amount of money for workers in their 20s, and it's not bad for those in their 30s.
But if you're in your 50s with a mere $93,000 socked away in a retirement plan, you may not get a whole lot of income out of your nest egg later in life. Having a job is a good way to make up for a balance that's lower than you'd like it to be.
Also, earning money could make it possible to keep your nest egg untapped for longer. And that could, in turn, give your money a little more time to grow.
2. Social Security could get cut
Some workers today fear that Social Security will run out of money by the time their retirement rolls around. The good news is that's unlikely to happen. The bad news is that the program may have to cut benefits in the not-so-distant future if lawmakers don't figure out a way to help it collect more revenue.
Since benefit cuts are a very real possibility right now, it's a good idea to plan to work in some capacity once you retire. The income from that job could help make up for the fact that your Social Security income isn't as robust as you may have expected it to be.
3. You may need a low-cost way to stay occupied
Being retired means having many free hours to fill on a daily basis. And that could get expensive.
The great thing about holding down a job is that you'll have something to keep yourself busy with. And rather than spend money to stay active and occupied, you'll instead get to earn money you can use to pay for expenses or buy yourself extra flexibility to travel or enjoy different types of leisure.
What does working as a retiree look like for you?
These days, holding down a job as a retiree doesn't have to mean working a cash register or sitting in a call center all day long. There are many creative gigs you can take on, like selling baked goods or crafts. Or, you can find a job that's extremely flexible, like driving for a ride-hailing service. You may even decide to start your own business.
Of course, if you manage to retire with plenty of money, you may not need to think about working as a senior. But in the absence of a truly large nest egg, it pays to think about what working during retirement might look like for you.