You can build a bigger bank by working a bit longer, but there are other benefits as well.
With older Australians increasingly concerned that greater longevity means their retirement savings may not go the distance, the thought of working longer and delaying retirement becomes more attractive.
While the financial reward of working longer is obvious, there are a number of less expected benefits that come with delaying retirement. Here are some of them.
My mother-in-law, who turns 72 this year, says she has no intention of retiring any time soon. She does clothing alterations from home and for various dry cleaning stores in the area. Working isn’t just about the money for her, but about maintaining a sense of social engagement as well. She isn’t alone in that regard. According to a YourLifeChoices survey, 24.5 per cent of respondents who were still working said they were doing do it to remain socially connected.
Making the transition easier
Working beyond retirement age, particularly in part-time employment, might provide you with the opportunity to think through some important retirement issues. For example, how will you go about filling in your time during retirement? It’s possible that working beyond retirement age might spark new ideas to making your retirement more interesting or lead to your engagement with new hobbies and interests.
Better for your health
There is increasing evidence that the payoff of working past the age of 65 may go beyond finance. Studies have linked working past retirement with better health and longevity. A 2016 study of about 3000 people suggested that working even one year beyond retirement age was associated with a nine to 11 per cent lower risk of dying during the 18-year study period, regardless of health. A 2015 study of 83,000 older adults over 15 years suggested that, compared with people who had retired, people who continued working beyond age 65 were about three times more likely to report being in good health and about half as likely to have serious health problems, such as cancer or heart disease.
Fewer retirement years to finance
According to YourLifeChoices research, the biggest fear for retirees is outliving their money. Although half the survey respondents said the reason they worked beyond retirement age was for the money, it also works the other way around. That is, you are closing the retirement gap in two ways at once. As well as building up a bigger bank of money for retirement, you are also reducing the number of years you will have to finance day-to-day without work income.
Did you work past retirement age? Aside from the financial benefits, did you discover any other advantages?
Are you eligible for an Age Pension? Do you know your rights? The PensionChecker™ tool has all the information you need.
Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.