Should you work after retirement? Here’s what you need to know
The idea of working after retirement is considered a good thing for many people around the world. It could help supplement their retirement savings and social security (if they have one), and some may see it as a way to stay physically and mentally active.
However, even though working after retirement is seen as a good option (with benefits), it certainly doesn’t come without some drawbacks to be aware of. This Pacific Prime Latin America article discusses the pros and cons of working after retirement to help you decide what to do when you reach that ripe “golden age.”
What typically happens when you reach retirement age
In an ideal person’s working life, they would have spent the last 30 to 40 years saving away in either a private pension or investment-linked insurance plan, and contributing to their social security account through work or voluntarily. By the time of retirement, they can easily decide to put everything down, knowing that they are financially content and stable and can fulfill a different form of passion during their golden years.
Sounds good? Perhaps the above may ring true, and for some, it is, but in reality, people’s circumstances are different in that:
- Their career paths are not linear and change over time;
- They don’t have access to the best financial support or advice;
- Their burdens and personal issues may force them to make difficult financial choices in life;
- And more.
So, upon retiring, people may need more savings or are not at a stage in life to live comfortably, and so have no choice but to continue working past retirement. And if you find yourself in the same shoes, let’s help you by covering the pros and cons of working after retirement below.
The benefits of working in retirement
There are several benefits to working after retirement. Here are some to mention:
1. A lovely addition to your savings
“Approximately 40% of retired Americans rely exclusively on Social Security benefits in retirement.” – Benefits Pro
Whether or not you have sufficient savings depends on the choices you’ve made or the circumstances you’re in, but it is always good to know that working longer can increase the money available and bump up whatever savings you currently have.
Get support from your employer
Nowadays, financial security is what most employees insist employers provide as part of their employee wellness strategies. So if you are still working and intend to continue working into your retirement years, then speak to your manager or HR professional about getting support for financial planning. There may be options available through a well-designed employee benefits plan that can strengthen your financial base and enable you to save better.
What can employers do to help?
Employers can consider the following 3 financial wellness tips to support employees who experience financial difficulties:
- Connect with employees to understand their financial concerns and offer workshops to discuss financial matters.
- Provide the right financial wellness benefits from day one, especially those that appeal to every cohort – young or old.
- Invest in a well-rounded financial wellness program to empower employees to make the right financial decisions. Learn more here.
Get in touch with Pacific Prime Latin America for more tips and suggestions!
2. Better overall health
“Working later in life may be beneficial for some but have adverse effects for individuals in high-demand or low-reward jobs.” – PsyPost
Provided you enjoy your work and do not experience stress that can lead to burnout in the work you do after retirement, then you could be looking at better overall health. Here’s why:
- According to a University of Maryland study of more than 12,000 retirees, having a post-career job was associated with fewer major diseases and functional limitations.
- Working in retirement can support your mental health.
- You will likely exhibit lower diagnosis rates for conditions like high blood pressure, cancer, diabetes, heart disease, and psychiatric problems.
By being physically active and doing work, you may feel a sense of purpose, which may lead you to live a longer and happier life. On that note, the Japanese concept of “Ikigai” is one you may want to learn about for a better and more meaningful life in retirement.
The drawbacks of working after retirement
Although the aforementioned benefits of working after retirement may sound appealing, and rightly so. You should also be aware of the downsides of making such a decision. Here are a few reasons:
1. Your social security benefits may be affected
If you are still working, then what you get may change. The social security administration could reduce your benefits when working – depending on your income. So you should check with the Social Security Administration to determine how working in retirement could affect your benefits.
2. Working in retirement could alter your taxes
It’s a no-brainer that working means you still have to pay income taxes, and doing so might affect your tax liabilities for social security benefits. It is worth seeking financial advice on this and whether paying the taxes will, if at all, benefit you or the revenue office instead.
3. Lost time
It’s a brutal truth that the time you spend working could be better spent on something else. Unless work is what you want and brings you total happiness, you could be throwing away precious time spent on yourself, loved ones, or personal passions and hobbies.
Other considerations for retirement
Rather than concentrating on whether you should work after retirement, you should also consider securing a retiree health insurance plan in Mexico. One of the ways to ensure you are financially secure and have support in case of a medical emergency is to reach out to a health insurance broker and employee benefits specialist like Pacific Prime Latin America.
Health equals wealth
Even though working can keep you healthy and strong into your retirement years, life will still follow the rule book, and sooner or later, you will need to visit the doctor for a check-up or consultation, and in the worst-case scenario, receive emergency treatment which requires admission and a whole host of associated medical costs.
- 6 things to know about healthcare in Mexico for expat retirees
- Why healthcare in Latin America is better for retirees
- Health and medical insurance options for expats in Mexico
Object to the idea of health insurance?
Many before you have rejected the idea of securing health insurance, as medical costs in countries like Mexico may be perceived as low, only to make a U-turn down the line. Generally, it’s never a good idea to assume that costs don’t add up and illnesses rarely come by. In fact, medical inflation over the next few years will likely push up the cost of procedures and medical services in countries like Mexico, the U.S., and regions like Latin America.
So for total peace of mind, we suggest reaching out to an expert at Pacific Prime who can guide you on securing a tailored plan that covers numerous benefits and offers the right protection for your needs while sticking to your budget.
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