Retirement & IRAs

5 Reasons to Get a Job After You Retire

For many retirees, the thought of not having a job can be stressful. Some find they run out of things to keep them busy, while others miss the camaraderie and sense of purpose work gave them. Also, because people are living longer and relying on savings longer, there are genuine concerns about having enough money to pay for retirement.

That's why many retirees are deciding to go back to work. According to a recent study from the Associated Press*, 82% of Americans 50 and older expect to work after retirement.

Deciding to go back to work may not be an easy decision, but we're here to help you understand your goals and get the most out of your retirement. Here are a few things to consider to help you determine if having a job at this point in your life is right for you.

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1. Financial Stability

Many retirees think they have enough savings and income for their retirement plan to cover the basics. But many retirees don't plan for inflation, long-term care and rising medical costs.

According to the 2014 Retirement Confidence Survey [PDF-2.3MB], only 18% of Americans are very confident they will have enough money to live in retirement.

Working during retirement will allow you to earn an income, which you can use to help pay the bills. This lets you keep more of your existing savings intact, and earning interest, to use at a later date. Also, if you have a pension, your benefits from your former employer are normally not affected unless you plan to return to work for them. Check with your plan provider to see if returning to work will have any impact on your benefits.

For additional help making sure you're still headed in the right direction, visit Calculate My Retirement.

2. Increase Your Social Security Benefits

If you continue to work, you can delay the start of Social Security benefits. The longer you wait, up until the age of 70, the bigger your monthly Social Security check may be.

If you retire and begin to receive benefits before your full retirement age as defined by the Social Security Administration, your Social Security benefits may be reduced by as much as 30%, depending on the year you were born. (See for more information.)

Once you reach full retirement age, you can work as much as you like without impacting your Social Security benefits. There are no earning limitations once you reach your full retirement age. However, you should consult your tax adviser regarding the tax consequences of such work arrangements on your Social Security benefits.

To learn more, see how much you can expect from Social Security.

3. Eligibility for Health Insurance Benefits

The high cost of medical care can be quite a shock when you are no longer part of a company plan. This is especially true if you retire before 65, the age you qualify for Medicare. Having a job that pays medical benefits after you retire could save thousands of dollars a year in medical expenses.

Once you qualify and begin receiving Medicare, you may face significant out-of-pocket expenses including prescription drug costs. Even after you turn 65 and qualify for Medicare, it can be helpful to have additional health insurance through your employer to cover any gaps in Medicare coverage. Contact your State Farm® agent for information about how State Farm Medicare Supplement insurance helps pick up where Medicare leaves off.

4. Social and Health Benefits

Exercise, reading, and crossword puzzles may help you stay fit physically and mentally, but working is also an excellent way to stay engaged.

People who work after retirement are often more active and socially connected, which can mean better overall health and fewer medical issues. Also, having a part-time job can help you feel involved without being tied to a career and long hours.

Recent studies have shown that those who work following retirement reported being generally healthier and happier than their fully retired peers, whether they worked full-time or part-time. Other studies have shown that working can delay the onset of age-related diseases like dementia.

5. An Encore Career

Retirement can be the start of a whole new career.

Many seniors thrive in encore careers. You can begin a job that lets you give back to the community or channels your passion into your own small business. An encore career provides a second chance at job satisfaction.

A 2008 study by the Families and Work Institute found that people who go back to work while in retirement are more satisfied with their jobs than people who have not yet managed to retire.

Let your imagination be your guide to a retirement career. AARP has some great resources on helping you start a second career.

*Source: Associated Press NORC Center for Public Affairs Research, 2013.


Neither State Farm nor its agents provide tax, legal or investment advice. Customers should consult their own legal, tax, or investment advisors regarding their specific circumstances.