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How Long Should I Work?

How Long Should I Work?

December 30, 2019
According to a recent report from the Congressional Budget Office, the number of people working from 55 to 79 years old has increased by more than 1/3 over the past two decades. This is a result of a combination of fewer men retiring early and more women joining the workforce. After declining for a number of decades, the number of people working in that age category increased from 33% in 1995, to 44% in 2018. The changes were related to a number of factors including improved health, increased education and a shift away from labor-intensive, blue-collar jobs according to the CBO.
At Impel Wealth Management, we have found that people are working longer for a number of reasons. The biggest being maintaining employer-based health insurance until Medicare kicks in at age 65. Uncertainty around health insurance and healthcare costs in retirement are a driving force here. We have also seen an increase in the number of people who are working longer to delay taking Social Security benefits early, and locking in lower/reduced benefits prior to their full Social Security retirement age.
It is important to remember that people who HAVE reached their full Social Security retirement age can earn an unlimited amount of income while collecting their benefits. Therefore, we see more people continuing to work for socialization, structure and income into their early retirement years. This can be very beneficial on a number of levels for people who have the health to continue working.
A separate survey conducted for Provision Living Senior Living Communities in St. Louis also found that many people continue working in retirement because they have not accumulated the means or resources necessary to retire without a significant reduction in lifestyle. Issues can sometimes include supporting family members, paying off debt/mortgage and providing for unreimbursed medical and prescription drug expenses.
How long you should work is a very personal question, unique to each individual and family situation. Some people enjoy working. It can help prevent boredom and loneliness, as well as provide additional cashflow for things you want to do in your golden years. Helping clients analyze both their personal and financial situation to determine when the best time to retire is one of the things we love doing. Building a retirement plan to help people transition from work life to retirement life with joy and confidence is very rewarding as we all continue "Moving Life Forward".