Why more and more retirees aren’t actually leaving the workplace.
The idea of retirement may conjure images of leisurely days spent reading, pursuing hobbies and traveling. Today, however, many retirement age Americans are choosing to, well, not really retire at all. According to a U.S. jobs report, almost 19% of people 65 or older were working at least part time in the second quarter of 2017 – the highest rate of employment for the age group since Social Security benefits began in the 1960s. That number is up from 13% in 2000, and is expected to increase to 32% over the next five years.
So why are so many forgoing a life of leisure? People are living longer than ever – and so must support themselves financially for longer, too. Studies show the opportunity to stay physically and mentally active by working is just as appealing as the paycheck for many who choose to work past retirement age. Instead of being a time to stop working altogether, research suggests that for many retirement has become a chance to pursue an “encore” career, where they can both earn an income and do work they find personally fulfilling. A 2014 study by Encore.org found that 4.5 million people between the ages of 50 and 70 have such a career, often with roles in public service or education.
A 2015 study of working retirees further supports these findings. About 15% of responders said they continued working because they enjoyed their jobs and saw no reason to stop. About a quarter of survey responders sought to achieve balance by working – wanting the income but also to maintain the social and mental benefits of staying engaged in a workplace. Another 15% of workers sought to give back and make a difference through their work. Almost 30% of survey responders needed to work for the income.
Whether you choose to continue working in your current profession, try something new, or enjoy a retirement filled with the hobbies and people you love most – there are many ways to stay active in your golden years. As your income can affect things like Social Security and Medicare premiums, just be sure to keep your financial advisor up to date as you determine the retirement that works best for you.
Sources: Bloomberg; New York Times; Pew Research Center; Investopedia; FoxBusiness.com; AARP; U.S. News; newretirement.com; Encore.org; Fast Company; Kiplinger; Wall Street Journal