The decision to keep working into what has traditionally been your retirement years is more than just financial. There's an abundance of research showing continuing to work later life has lots of benefits for both your physical and mental health as well.
Social activity and health benefits
People who work after retirement often remain more active and socially connected, which can mean better overall health and fewer medical issues. Working part-time can give you a sense of being part of something without being tied to a career and long hours.
Key Takeaways. Rules surrounding Social Security benefits established age 65 as a common retirement age. Men retire at an average age of 64.6 years, while women remain at work until age 62.3.
A 65-year-old can expect to live another 19 to 21.5 years, on average, according to the Social Security Administration. What's more, the government agency says a third of 65-year-olds will hit age 90, and 1 in 7 will live beyond age 95.
“Continuing to work for as long as possible will absolutely give you more choices and financial freedom in retirement,” Duran explains. “Working for a longer period of time not only gives you more savings and builds your safety net, but it also provides health benefits which you don't have to pay for personally.”
Each of these five challenges — low interest rates, market volatility, sequence of returns risk, uncertain government policy, and increasing longevity — can negatively affect retirement savings alone or in tandem with one another.
One frequently used rule of thumb for retirement spending is known as the 4% rule. It's relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement.
Men responding to the early retirement offer were 2.6 percentage points less likely to die over the next five years than those who did not retire early. (Too few women met the early retirement eligibility criteria to be included in the study.) The Dutch study echoes those from other countries.
If you work, and are at full retirement age or older, you may keep all of your benefits, no matter how much you earn. If you're younger than full retirement age, there is a limit to how much you can earn and still receive full Social Security benefits.
The average retirement age in Australia is 55
However, the average age people aged 45+ said they expected to retire – 65.5 years – was much later than the average retirement age. And on average, Australians can expect to live to 85 for women and 81 for men (ABS, 2021).
While some keep working because they need money, others decide to stay in the work force for other reasons; they like the stimulation and social life that comes with having a job. “You get to see people. It uplifts your mood,” Ms. Catena says.
Why Do People Go Back to Work After Retirement? It turns out that there are quite a few reasons why people consider working after retirement, including: Needing or wanting an additional income besides your pension cheque to improve or fix your house, travel more often, or help family members.
You don't have to retire when you reach State Pension age and there are many advantages to working in later life. As well as topping up your income, working may also help to keep you mentally, physically and socially active. There are benefits for your employer too.
71% reported they were worried about being less mentally active in retirement, and 64% about being less physically active. Contrast this with the prospect of losing social and friendship ties from work where 50% of respondents found it a frightening prospect.
For many people, the hardest tasks in retirement are establishing a structure and personal relationships to replace what they had in their work environments. Work dictated the structure of their days and weeks for decades. In retirement, that structure has to be replaced.
Results indicate that complete retirement leads to a 5-16 percent increase in difficulties associated with mobility and daily activities, a 5-6 percent increase in illness conditions, and 6-9 percent decline in mental health, over an average post-retirement period of six years.
66-67 – Depending on your year of birth, your Full Retirement Age (FRA) will be between 66 and 67. For example, if you were born in 1955, your FRA is 66 years and 2 months while if your birth year was 1959, your FRA is 66 years and 10 months.
Early research on the relationship between retirement and happiness is derived from psychology, and mainly describes the relationship between retirement and happiness. These studies concluded that retirement is associated with lower life satisfaction, depression, and lower happiness (9, 10).
Waiting to retire at the end of the month could be a good idea if you want to get your full pay for that period. This can also eliminate gaps in pay, depending on when you plan to begin drawing retirement benefits from a workplace plan.