Retirement should be an enjoyable and rewarding period of your life—but if you don’t have enough savings in place, it can be a decades-long struggle. Many retirees, or would-be retirees, plan to have jobs after retirement, as casual or part-time employees, to cover unanticipated expenses. But working after retirement should not be your backup plan should you run out of money. Retirement work can offer social interaction, structure, and intellectual and creative fulfillment, but it’s unlikely that you’ll be receiving the level of pay and benefits you experienced during your career years. Late-career professionals who plan to continue working should consider some of the realities about going back to work after retirement and explore alternative options to create reliable income. Here are some tips for building a stable future that don’t rely on earning a paycheck through retirement work.
Put your health first—you can’t work forever.
According to a 2018 survey, around one-third of workers today plan to retire between the ages of 65 and 69, and another third plan to retire at age 70 or not at all. In reality, most people retire sooner than they expect. More than half of people who plan to retire at age 65 or later are forced to stop working earlier than anticipated.1 A common factor is losing a job a few years short of age 65, uncovering few employment options, and reluctantly beginning retirement. Many other workers who retire early do so because of health problems. Work that seems easy to you now may become more difficult as you age. This is particularly true if your job requires a certain level of physical strength or stamina. When you think about it, going back to work after retirement actually goes against one of the main reasons retirement exists in the first place: Working is more difficult when you’re older, and health problems make it difficult to do your job properly.
If you’re going to earn less, work less.
When you reach the later years of your career, it can be challenging to match the employee benefits and salary level of your mid-career years. Many employers consider candidates in their sixties too old to hire—even those who have not reached their official retirement age. Working after retirement needs to be done in a way that balances your time with necessary income. Perhaps, if you have the skills and professional connections, you can set up shop and work as a consultant. Or you can start your own small business. But if retirement work takes up all your time and doesn’t provide enough money to live on, you need to find another income solution (like taking in a roommate). One way to prepare for this before you’re retired and find yourself short is with a deferred income annuity from New York Life which will subsidize your income with ongoing payments throughout your retirement.2 If you put money into your annuity over time during your pre-retirement career years, you can enjoy the benefits of deferred income later on—and the longer you have been adding premiums, the higher your payments will be when you draw on the annuity after you retire.3