Many people are counting the days until they retire. Then there’s Barbara Levine of Northbrook, Ill.
When Levine turned 70, she quit her high-pressure job in information technology and now works 16 to 20 hours a week at a women’s clothing boutique.
“I’m lucky I don’t work for the money,” says Levine, now 76. Levine spends most of her paycheck on clothes at the boutique.
Continuing to work at retirement age, which Levine is doing, has many benefits. It allows people to withdraw more from their nest eggs when they fully retire. Social Security benefits increase significantly when you delay benefits.
Some of the most important benefits are not financial, but physical and mental. People who continue to work live longer and have less dementia.
But that doesn’t mean everyone has to keep working. Many people have boring or unpleasant jobs, and simply can’t or don’t want to work.
On top of that, many Americans who don’t have enough retirement savings have no choice but to continue working past the normal retirement age. About half of Americans are not saving enough money for retirement, experts have calculated.
There were employment rates for seniors On display. In the year In 2022, 26.6 percent of Americans ages 65 to 74 were working, up from 20.4 percent in 2002, according to the U.S. Bureau of Labor Statistics. Among those 75 and older, 8.2% work, more than 5.1%. Labor participation rates are projected to increase for both groups.
Working past retirement age is not an all-or-nothing proposition. You may want to stay in the same job but work fewer hours or opt for a lower-paying part-time job, like Levine.
“We encourage people to keep working,” said Levin’s financial adviser Ed Girtensen of Northfield, Ill. It’s always been a little taxing to retire and play golf. Working on a golf course is another matter.
Another of Gjertsen’s clients does the same. Jim Murphy, 70, of Glenview, Ill., works out at the municipal golf course in the summer and at the municipal gym in the winter.
Murphy, who is retired for a packaging company, earns $500 a month, which he says will help a little in retirement. Mostly he enjoys the relationship with other people.
“I see new people, I meet new people, I joke with the guys,” Murphy says. “It’s fun to be a part of it.”
Here are four reasons you should consider working in your late 60s or 70s.
1. It puts pressure on your money
Every year you work is another year to save money instead of draining your portfolio.
“You get two ways,” said John Crowell, 67, who started working as a real estate agent in St. Augustine, Fla., after selling his business and retiring as an insurance agent. “The money is growing, and the years are decreasing.”
Math is powerful. If you retire at age 62, you can expect to spend about a year in the workforce in retirement for both, notes Alicia Munnell, director of the Center for Retirement Research at Boston College. If you retire at age 70, you will spend about one year in retirement for every four as a worker.
“I’ve long advised people to work as long as possible,” says Munnell, 80, who plans to work another two years.
2. Your Social Security benefits will continue to grow
If you delay collecting Social Security benefits from age 62 until age 70, your monthly check will grow by at least 76 percent. Because of the way Social Security benefits are calculated, it can grow significantly more than that. Your benefits at age 60 are based on your 35 highest earning years after adjusting for inflation.
If you have not worked for 35 years, or if you have had a few years of low income, benefits will grow faster. Because Social Security calculates benefits based on average wages at age 60, many workers work past 70 and steadily increase their monthly checks as their wages increase with natural inflation.
Mike Piper, a St. Louis certified public accountant a Free website To maximize benefits, calculated benefits for a hypothetical 62-year-old worker who maxed out her Social Security contributions in 20 of her 35 working years. For the remaining 15 years, she received between 50% and 90% of Social Security’s maximum income.
If she retired today at age 62, she would earn $2,347 a month for the rest of her life, adjusted for inflation. If she continues to work until the full retirement age of 67, she will earn $3,538 a month in today’s dollars. And if she waits until 70, she’ll earn $4,516.
But even if she starts her monthly benefit at the maximum age of 70, she will get a small increase in her monthly benefit each year by working full time. Piper calculates that it will grow to $4,748 by age 75—a steady 5% increase by age 70. If she works at age 80, that will increase to $5,014—an 11 percent increase over age 70. 3% annual wage inflation for this example.
3. It’s good for your health.
Research shows that working longer hours is associated with increased longevity and dementia. In the year A 2020 Lancet study on dementia found that countries with earlier retirement ages have increased rates of dementia.
Depending on the work you do, you may get a lot of physical activity, which is good for your health. But even in sedentary jobs, you use your brain, which helps prevent dementia.
“It gives structure to your day,” says Boston College’s Munnell. “It keeps you engaged and mentally active.”
The act of getting up and going to work every morning can be a form of exercise. Commutes often involve physical activity. If you are working in a large office building, you will want to walk more than your home.
4. Work increases social relations
Humans are social creatures and isolation can do a lot of harm. Many jobs involve meeting other people, which is good for you.
of Jacksonville, Fla. “Having consistent connections with people can help your brain work harder to fight depression and dementia,” says Carolyn McClanahan, MD, a financial advisor and MD. Crowell, a real estate agent in St. Augustine, is among her clients.
Working longer hours is also good for marriage, says McClanahan. Many couples do not have a plan for what will happen when both of them are not working.
He continued, “Every body needs time to be alone with other friends. Sometimes when one spouse is unable to work, the other spouse needs more time.
McClanahan said couples can spend more time together. “If a married couple spends 24 hours a day together, if one of them dies, they will mourn the other.”
Write to Neal Templin at [email protected]
