Originally published: 9/30/2021.
Phasing into retirement by continuing to work at a reduced level is becoming increasingly popular among a new generation of near-retirees.
Work during this phased-in transition may take a number of forms, from fewer hours with a current employer, to a new role that an individual feels passionate about.
This interim step between full-time employment and full-time retirement can help individuals meet some of the biggest challenges they’ll face in retirement, including:
Maintaining financial security throughout a decades-long retirement is a monumental challenge, made more difficult by COVID-19 pandemic-related setbacks.
Working part-time as an interim step to full retirement, however, improves a retiree’s financial security by:
Allowing individuals to defer Social Security until they reach full retirement age, or even as late as age 70, which provides higher lifetime benefit payments and allows retirement savings to last longer.
Nearly 70 percent of Americans begin taking Social Security before they attain the age at which they would receive full income benefits, resulting in an average household loss of $95,000 over the course of retirement.1 As a consequence of lower Social Security benefits, retirement savings are in greater peril of running short.
Emotional and Mental Health
Researchers at the Harvard School of Public Health found that retirees were 40 percent more likely to have a heart attack than individuals of the same age who were still working, while another study out of the U.K. showed that nearly twice the number of retirees suffered from chronic conditions such as diabetes, stroke or cancer relative to those still working.2
It’s not just physical illnesses that can affect retirees, but depression, stress, and cognitive decline can arise from the loss of identity, purpose, status, structure, and friendships that can characterize retirement.
Working part-time combats these potential adverse health outcomes by:
Reducing marital stress in retirement, whether that stress is related to finances, increased time together, or a difference in a desired lifestyle. (Research shows that 38 percent of couples disagree on the lifestyle they want to lead in retirement.4)
The best approach to retirement is as individual as you are, which is why it may be helpful to have a New York Life financial professional at your side during this critical decision-making time.
Learn more about how New York Life can help you achieve a more secure and rewarding retirement or find a New York Life financial professional near you.
1. Jason J. Fichtner, Shai Akabas, Gary Koenig, and Nicko Gladstone, “How to Help Americans Claim Social Security at the Right Age,” August 2020.
2. Doreen Rosenthal and Susan Moore, “The Psychology of Retirement,” October 30, 2018.
3. Alzheimer’s Association, “Can Alzheimer’s Disease Be Prevented?’ https://www.alz.org/alzheimers-dementia/research_progress/prevention?utm_source=google&utm_medium=paidsearch&utm_campaign=google_grants&utm_content=alzheimers&gclid=Cj0KCQjw1dGJBhD4ARIsANb6OdnOSbR9K4WeoLpOrXRvVwf38voxN_dDvk_LQ7fR32QZ0LSK6YpOevkaApL2EALw_wcB
4. Margery D. Rosen, “Advice for Couples Who Stagger Retirement,” AARP The Magazine, April/May 2016.
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