The traditional concept of retirement involves the cessation of working for a living on a daily basis. However, the current political and economic uncertainty has forced many older workers and retirees to alter their retirement plans in many ways. Of course, one of the most common - and simple - remedies for financial uncertainty is to continue working. And this is the only path available for many lower and middle-class workers who have seen their company pensions and personal retirement portfolios shrink to a fraction of their former values. But the ramifications of working during retirement aren't all bad and can provide benefits that go beyond the balance sheet. (For related reading, also take a look at Top 6 Ways To Ruin Your Retirement.)

IN PICTURES: 6 Hot Careers With Lots Of Jobs



Cash Flow

Of course, the most obvious financial benefit of continuing to work when you expected to be retired is the additional income that you reap. Some people continue to work their old jobs for another few years, while others may quit their previous jobs and work part or full time for another employer. But even a worker employed for 20 hours a week at $10 an hour will generate income equivalent to that of a $100,000 retirement portfolio generating 10% per year on a pretax basis. Perhaps just as importantly, continuing to work during retirement reduces the number of years over which the retiree must spread his or her retirement savings when the time comes to stop working altogether.


Loss of Time

Those who are required to continue working will most likely have to postpone some or all of their retirement plans, such as taking that leisurely trip to the West Indies or building an enormous model train empire in the basement. Working during retirement leaves less time to do the things that you always imagined you'd have time for when you left the workforce. This is perhaps the biggest disadvantage to working during retirement.

Emotional Adjustment


Those who carefully planned to retire at a certain time and then had to adjust their schedule may struggle with deep disappointment or even loss of personal dignity in some cases. The harsh reality of having to get up in the morning for work at age 70 can eat deeply into the psyches of many people, especially if they had planned to be busy enjoying their grandchildren at this point in their lives. Counseling or other professional help may be necessary in some cases.

IN PICTURES: A Bigger Salary Or Better Benefits?



New Career Satisfaction

This represents the other side of the coin from the previous issue. Some who must keep working may be able to start a new career in another field that provides emotional satisfaction. Some may find fulfillment working at a store related to a hobby or other interest, while others might enjoy doing charitable work, such as a stint in the Peace Corps.


Health Issues

Continuing to work into one's declining years may not be what the doctor ordered in many cases. Older workers should monitor their health carefully and take care not to overexert themselves. However, the additional financial security and health care coverage that can come with continued employment can also serve to reduce stress and provide peace of mind. But those with health concerns should think carefully about the risks that come from working during old age.

The Bottom Line
The consequences of working during retirement can be both good and bad. In many cases, the benefits of this course of action will outweigh the disadvantages, but several factors must be weighed carefully in order to accurately determine the feasibility of maintaining employment during your declining years. Doctors, counselors and financial advisors may all have valuable input for those grappling with this decision. (For additional reading, also see 5 Tax(ing) Retirement Mistakes.)

Related Articles
  1. Mutual Funds & ETFs

    Top 4 Davis Funds for Retirement Diversification in 2016

    Discover the four best mutual funds managed by Davis Advisors that pursue different investment strategies that can help diversify retirement portfolios.
  2. Retirement

    Is it Safe for Retirees to Invest in Technology?

    Tech stocks are volatile creatures, but there are ways even risk-adverse retirees can reap rewards from them. Here are some strategies.
  3. Retirement

    Roth IRAs Tutorial

    This comprehensive guide goes through what a Roth IRA is and how to set one up, contribute to it and withdraw from it.
  4. Insurance

    Beware the Sneaky Math of Universal Life Insurance

    Universal life insurance's cash value can be a cash cow – if there's any left. Read on to see if it'll work as an income source after you've retired.
  5. Mutual Funds & ETFs

    The Top 4 Russell Funds for Retirement Diversification in 2016

    Discover four mutual funds administered and managed by Russell Investments that would add diversification benefits to a retirement portfolio.
  6. Mutual Funds & ETFs

    The 3 Best American Funds for the Income Seeker in 2016

    Learn about American Funds' mutual fund offerings, their past performance compared to peers and three American funds to consider for income investors.
  7. Term

    How Traditional IRAs Work

    A traditional IRA is a tax-advantaged retirement account that includes stocks, bonds, mutual funds and other investments.
  8. Retirement

    Longevity Insurance: Can You Afford Life into Your 90s?

    A man who reaches retirement age is likely to live until he’s 84. A woman is likely to make it to 86. But what if you live longer?
  9. Investing

    Retirees: 7 Lessons from 2008 for the Next Crisis

    When the last big market crisis hit, many retirees ran to the sidelines. Next time, there are better ways to manage your portfolio.
  10. Investing Basics

    The Top 4 Income Investments for Retirees in 2016

    These four investment types should mitigate risk in 2016 for retirees seeking income.
RELATED FAQS
  1. What's the difference between Social Security Disability Insurance (SSDI) and Supplemental ...

    Disabled persons can receive payments through two programs: Social Security Disability Insurance and Supplemental Security ... Read Full Answer >>
  2. Do 401(k) savings earn interest?

    While there is a wide array of investment accounts available to investors, one of the most common for employees is the 4 ... Read Full Answer >>
  3. How liquid are variable annuities?

    Variable deferred annuities and variable immediate annuities are not considered liquid. Variable deferred annuities carry ... Read Full Answer >>
  4. Can you fund nonqualified deferred compensation plans with life insurance?

    It is possible to fund nonqualified deferred compensation plans with life insurance. A nonqualified deferred compensation ... Read Full Answer >>
  5. Are 401(k) withdrawals considered income?

    All 401(k) withdrawals are considered income and subject to income tax, including capital gains. When you take a premature ... Read Full Answer >>
  6. Are variable annuities a good retirement investment?

    There are many financial advisors who advise against variable annuities because of high fees and low returns. Still, some ... Read Full Answer >>
Trading Center