Many people look at retirement as a time to stop working and instead enjoy life. But it's not always that simple.
The reality is that while plenty of people manage to kick off their senior years with a nice 401(k) or IRA balance, there are also many people who enter retirement with virtually no money socked away. And since it's very difficult to live on Social Security alone, a fair number of seniors may have no choice but to work in some capacity once they resign from their primary careers.
A good 21% of Americans, in fact, think they'll be stuck having to work in retirement, according to a recent Natixis report. But rather than looking at that as a negative, it pays to consider the multiple benefits involved.
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When you'd rather just kick back and relax
For some people, working during retirement can be a disappointment. It's easy to see why someone who worked a demanding job for decades would want a period of life that's devoid of having to punch a clock.
The good news, though, is that working in retirement can look very different than working pre-retirement. In the latter scenario, you might need to maintain a certain schedule so you can earn a high enough paycheck to cover your expenses in full. In retirement, you probably don't need to earn as much because you'll at least have Social Security coming your way. So that right there is a game-changer.
Furthermore, Medicare eligibility begins at 65. Prior to that age, many people may feel compelled to keep working full-time so as to not lose their health coverage. Come retirement, working just a few hours a week may be feasible if you're not looking for workplace benefits so much as some supplemental income.
Remember, too, that the gig economy has changed the face of work. These days, you can earn money without having to report to an office or commit to preset hours. Knowing you have that flexibility might make the idea of working more palatable.
The perks of holding down a job in retirement
For many seniors, the decision to continue working boils down to financial necessity. If you're someone without a lot of savings, then the extra income will no doubt help.
But it's important to recognize the peripheral benefits of having a job in retirement. A big one is having something to do to stay busy.
It's hard to fill a week's worth of waking hours without spending a lot. And if you don't have a lot to spend, then working is something to consider, even if you can technically get by financially on the limited income that's available to you.
When you work, you have a way to anchor your schedule and a way to socialize. You get to use your skills and, in some cases, move your body around rather than staying relatively sedentary at home. These are important things.
In fact, even if you're someone who's entering retirement with a few million dollars in savings, it still pays to consider holding down some sort of job. If you don't need money, it can be an unpaid job. There are plenty of community organizations that no doubt need more hands on deck.
If your goal in retirement is to not work and your financial situation is forcing you to have a job, you may be disappointed. But try not to be. There are numerous perks to being employed in retirement that you might really come to appreciate once your career officially wraps up.
