It’s unfortunate that many senior citizens do not have a choice when it comes to working past the age of 65. However, the senior citizens that do have a choice and end up retiring at that age may be doing themselves a disservice. It is important to consider the advantages of working past the age of 65 from a financial and personal perspective. Some people with disabilities may not have a choice in the matter. However, an increasing number of senior citizens retain their health well into old age, and they will have options galore when it comes to working.
1. Retirement funds can go fast
Improvements in medicine and senior care have changed the financial situation of a lot of senior citizens. People are much more likely to live past the age of 90 today, meaning the funds and pensions that senior citizens accumulate during their working years are going to have to last much longer than they would have 30 or 40 years ago. An increasing number of senior citizens will simply run out of money if they are not prepared, forcing them to go back to work at menial jobs at the worse time.
However, senior citizens that continue to work past the age of 65 can continue to save money while living off of what they earn, thus forgoing the need to dip into their retirement savings. In some cases, working just a few short years can make a huge difference in the amount of money you have in retirement, putting you in a much better situation when the day comes that you give up work for good.
2. Medical expenses
Senior citizens tend to have higher needs when it comes to medical expenses than any other age group. While senior citizens typically have insurance and government medical benefits, not everything is going to be covered. Far too many elderly people are in a situation in which they have to draw on their savings in order to pay for something medically-related and in some extreme circumstances some senior citizens are even forced to choose between medication or other necessities of life.
For seniors that choose to continue working, not only will their income be higher, but they will also enjoy the benefits that are often provided by their employer. These benefits often cover far more than some of the retirement benefits, and many even include prescription drug plans that make medications far cheaper to purchase, or even free, depending on the type of coverage offered. This allows seniors to spend less of their own money on medical needs, allowing them to divert those funds toward retirement or even a luxury here and there.
3. The psychology of retiring
While many people look forward to enjoying the freedom associated with retirement, it isn’t without its mental and emotional costs. For one thing, senior citizens that stay in the workforce are much more likely to retain their cognitive ability. Many senior citizens become isolated after retirement, which is going to have widespread psychological consequences for anyone. Senior citizens that stay in the workforce are also going to be that much more likely to stay up-to-date with technology, since technological changes will have an effect on each and every workforce.
4. Financial benefits of continued work
There are numerous financial reasons you should keep working if you feel up to it. The first financial benefit from working is pretty obvious: you keep earning income. This steady paycheck allows you to continue to pay for your expenses of your life without needing to turn to your retirement benefits for necessities. If you choose to keep working, a financial adviser can tell you how best to make sure you don’t get overtaxed for staying in the workforce, making your retirement money go further.
Most people are still going to retire at some point, even if it’s after 65. If they work into their seventies or later, they will get much larger pensions in the process compared to what they would receive if they’d stopped working only a decade ago. Workers who stay in a company for longer will also get employee benefits that are only granted to people that have stayed in the company for an extended period of time. Even social security benefits tend to be elevated for people that have stayed in the workforce for longer. It all comes down to this: the longer you work, the more money you can save and contribute to both your retirement funds and social security. Therefore, when you do finally retire, you will be able to draw more out of your retirement each month.
With all the benefits of working past age 65, it’s a wonder more people don’t choose to do it. By simply working a few extra years, you can easily put yourself in a much better financial situation, allowing you to save and spend more when you do decide to take a permanent vacation from the office.