You will often hear that working in retirement is a mixed bag, financially speaking. On the one hand, you earn money that can increase your retirement income and increase your purchasing power. This is a good thing.
The bad thing, however, is that the more you earn, the higher your tax burden becomes. And also, the higher your income, the more likely you are to be taxed on some of your Social Security benefits.
Also, if you work and file for Social Security before you reach full retirement age, you may have some of those benefits withheld if your earnings exceed a certain threshold. So all things considered, it’s easy to justify avoiding keeping a job once you’ve declared your official retirement.
But while working in retirement can lead to some unwanted financial surprises, it is nonetheless beneficial to keep a job. And the reason actually has nothing to do with money.
It all depends on your mental health and physical well-being
Receiving a paycheck is an obvious benefit associated with working in retirement. But income aside, keeping a job could offer a world of benefits you might not have thought of.
On the one hand, work could serve as your social outlet. And that’s important, because retirement can be an isolating time in life.
If you’re used to showing up at an office and being social, you might miss that routine once your career is over. And if you don’t have a decent number of fellow retirees to do activities with, you could quickly feel lonely. A part-time job in retirement could solve this problem.
Additionally, retirees often find themselves bored and uninspired in the absence of a regular routine. Working might give you the structure you need, while allowing you to fill in certain hours of the day.
Finally, when you don’t have a job to pick up, it can be quite easy to stay home and start living a more sedentary life. But it could be harmful to your physical health.
If you push yourself to work in retirement, it could give you a reason to leave the house and move. And it could lead to fewer health problems and lower health care costs.
A gesture to make
Some people insist that after a lifetime of hard work, the last thing they want to do in retirement is keep a job. But remember, if you’re not in dire need of money, you’ll have the freedom to take any kind of job you like, even if it means earning $9 an hour serving the cake at a bakery or $10 an hour caring for dogs. And so, the job you end up with might look more like another leisure activity than an actual job.
All in all, retirees often fall victim to mental health issues when they cease to have a place to go regularly. A part-time job could fill that void. So even if your income doesn’t need to be increased, it pays to consider working to some degree after your primary career is over.