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5 Reasons to Continue Working After Retirement

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Retirement Planning

Personal Finance

July 1, 2019

When you imagine yourself in your golden years...are you playing golf? Traveling the world? Or are you perhaps doing a combination of the two and still working?

For many people nearing retirement age, continuing to work, even part-time, may be something worth considering. Whether it’s done out of necessity or voluntarily, working after retirement has a ton of benefits.

Here are several reasons that a part-time career - or even running your own business - may benefit your finances and lifestyle in retirement.

‍1. You Want to Delay Receiving Social Security

‍As I’m sure you know, the longer you can wait to receive Social Security payments, the bigger your eventual monthly check. Depending on your date of birth, waiting to get payments until you are 65 or 67 will help increase your monthly Social Security income.

Plus, the longer you can remain in the workforce, the longer you can delay using your 401K or IRA for income. This can give your accounts more time to grow and build up your nest egg.

‍2. You Need Health Insurance

‍Another important number of future retirees need to be aware of is the Medicare insurance age. Coverage under Medicare does not begin until the age of 65. Purchasing an individual insurance plan can get very expensive. This is especially true if you have certain medical conditions in the past.

If you retired from your previous job before 65, taking another job with health benefits can act as a bridge until retirement. But even if you can wait until 65, Medicare doesn’t always cover everything. You could still have prescription drug costs and other health-related expenses.

But if you have Medicare and health benefits from an employer, this will almost certainly result in lower monthly expenses out of your pocket.

‍3. Working Helps You Stay Mentally Sharp & Physically Active

‍If you’ve been working your whole life, going from full-time to fully retired overnight isn’t an easy transition for a lot of people. Continuing to work after retirement age can help you stay mentally sharp and physically active. If you like what you’re doing, employment might help you feel younger and live longer.

Not to mention, working can also help you stay socially active and keep some sort of schedule. Having a career can give you a sense of purpose and help keep you motivated.

‍4. Build Up Your Nest Egg With Dual-Income

‍Some companies that offer pensions will allow employees to retire, begin receiving their pension, and then get rehired. While this isn’t the case for every employer, sometimes you can be rehired into a previous position or a different one. If this is the case, try to find one with less responsibility and fewer hours if you want more freedom.

If you can work this out with your employer, you can then save your pension checks and keep contributing to a retirement account. This dual-income will help you grow your nest egg so when you retire you won’t have to worry about keeping costs low.

‍5. Your Investments Have Lost Value

‍While the market has steadily increased since the 2008 financial crisis, some future retirees might not have gotten it all back or exited at the wrong times. The stock market can adversely affect many people counting on investments to retain or gain value.

If you’ve lost money due to poorly performing stocks or the dip in the housing market, you may be left in a bad financial position. If this is the case, continuing to work after retirement can lengthen your time horizon and build more income.

‍Final Thoughts

‍Just because you’re approaching retirement age doesn’t mean you have to quit working and start living off your retirement accounts overnight. Continuing to work after retirement can help give you additional income, purpose, and a healthy social life.

Whatever you choose, make sure you have a plan in place. The last thing you want to do is have to go back to an employer you didn’t like just because of money or benefits. The more you plan your future retirement, the less stress you can have.

‍Would you like assistance with your retirement plan? Simply request a call from a Bayntree financial advisor today.

‍Bayntree Wealth Advisors, located in Phoenix and Scottsdale, Arizona, provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.

Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.

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