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Useful Tips

Working after retirement: Will it help you or hurt you?

Top 12 Benefits of Working After Retirement

If you are approaching retirement age, can you still work after you turn 65?

In a word: yes.

In fact, there are many benefits to working after you’ve reached retirement age.

  1. More time to grow your retirement savings before you start withdrawing from it. Withdrawals from IRAs can be deferred up until age 70 ½, and 401(k)s can be deferred for the same amount of time if you still work for the company (if it’s from a previous employer, withdrawals are required once you reach retirement age).
  1. Decreasing the number of years you’ll need to draw on your retirement savings. Higher balance and fewer withdrawals equals better savings for you!
  1. As you work, you can continue to put funds into your retirements accounts, not only growing what was already there, but increasing the balance with direct deposits.
  1. You can increase your future monthly social security payments if you delay drawing on it. If you were born after 1960, you can withdraw unreduced monthly payments starting at age 67. However, the monthly payment increases by 8 percent each year it is delayed up to age 70. You can increase your payments by several hundred dollars by waiting, and that increase is permanent!
  1. Avoid income taxes on withdrawals from retirement accounts (other than Roth IRA accounts, which are pre-taxed at deposit time).
  1. You’ll be more mentally healthy – the Institute of Economic Affairs says retirement increases the probability of becoming clinically depressed by about 40 percent.
  1. You’ll be physically healthier, too, even if you have a desk job. The activity required is likely more than would be required at home. Retirees are 60 percent more likely to become physically ill, according to statistics.
  1. Research shows those who work longer often live longer. Their schedule and responsibilities keep them robust.
  1. Going to work offers a sense of social interaction, which is important to mental and emotional health, and can help you maintain quality relationships.
  1. Working can provide a sense of purpose and usefulness, which can help reduce stress and add balance and calm to your life.
  1. A job often comes with benefits. Even if they’re minimal, additional health insurance, paid time off, or other perks can be a gift to your daily life.
  1. You can mentor others in your field or with a similar passion, sharing your wisdom with the next generation of the workforce.

All of these reasons combined mean less financial and general stress, and we could all use less stress in our lives!

And never fear – working longer does not negatively affect your retirement savings or future withdrawals. Delaying withdrawing on retirement savings or earning a salary – of any amount – does not negatively affect your future or penalize your use of your retirement savings at a later date.

If you’re having conversations about when the best time to retire is, whether it’s your career or those in your family, know that AmeriChoice is here for you.