According to a new Gallup poll, 74% of Americans plan to work past retirement age. Working in retirement is a good way to generate income, save money, and continue to give your life purpose.
Research shows that within the past ten years, more baby boomers and senior citizens are starting their own businesses in lieu of full retirement. In 2015, 55- to 64-year-olds comprised 24% of the start-up business owners. But the rise of the “seniorpreneur” is not surprising when you consider that most people work their entire lives for the right to pursue their own independent business venture.
Whether you plan to work full-time, part-time, or start your own business, there are some reasons why people still to work during retirement:
1. You can generate extra income
Many retirees today are behind on their savings. According to a report by from the Economic Policy Institute, the average retirement savings is $95,776. If you average that over a 20-year retirement, that only translates to only $4,788 per year or $399 per month. Factoring in Social Security benefits (approximately $ 1,360 per month) your total income may still fall short of what you will need to offset the rising costs of inflation and healthcare.
2. You will save money
Occupying your free time comes at a cost. Even if you can take advantage of senior discounts provided by restaurants, museums or other leisure activities, you will still spend money. Since most retirees neglect to budget for leisure activities, working provides the means to generate income or “fun money” for travel and leisurely activities.
3. You’ll have a sense of purpose
Most people are thrilled about the freedom retirement brings. But although the idea of not working is appealing, you should not underestimate the boredom factor. According to the Institute of Economic Affairs, retirement increases the likelihood of clinical depression by 40%, and the diagnosis of a physical illness by 60%. By continuing to work, you will have a great reason to stay healthy mentally and physically.
Retirement can be a very emotional decision and our advisors at Financial Consulting Group want to help. We can provide you with objective advice on your financial outlook before you make any decisions about whether to return to work. We can help you calculate all your sources of income, keep an eye on your investments, advise you on a tax strategy and ensure that you have a solid plan that includes enjoying your retirement to its fullest.