Working in Retirement
written by Mike Ballew November 17, 2019

It’s an oxymoron: working in retirement. The whole point of retiring is to not work, yet more Americans than ever are employed beyond traditional retirement age. Join us as we explore the reasons behind this growing trend and the financial implications for those who participate.

A recent Pew Research poll found that 1 in 5 Americans age 65 and older work full- or part-time. That number has steadily grown since 2000 and it’s expected to go even higher. What is behind this sea change in traditional retirement?

"Those intoxicated by irrational exuberance took a severe beating when the music stopped playing."


Do you recall what happened in 2000? No, not Y2K – a totally avoidable event brought about by shortsighted computer programmers who failed to consider that calendar years would not forever be preceded by 19. 

The dot-com bust. The realization that online companies that don’t make money are just as worthless as regular companies that don’t make money. Those intoxicated by irrational exuberance took a severe beating when the music stopped playing. The Dow dropped a whopping 75 percent. 

It happened again in 2008 when the housing bubble burst; the market fell 50 percent. This wild ride on Wall Street over the past 20 years has forced more than a few retirees back into the workforce. The number one reason people work in retirement is the most logical: they need the money.


Another reason people work past retirement age is to have a sense of purpose. As hard as it may be for us working stiffs to believe, a life filled with golf and pleasure and leisure is not everyone’s cup of tea. Many retirees miss the social interaction that comes with working and the feeling that they are needed. Being employed provides the structure and intellectual stimulation that they need.

Nothing against these folks, but it’s not that retirement is boring and work is wonderful. Many of these people lack the imagination and drive to create a fulfilling retirement for themselves. It takes effort to explore new things and find a reason other than work to get out of bed in the morning. The sad part is, a day is coming when they may be physically unable to work. What are they going to do then? 

Just because the first thing you experienced in life worked for you doesn’t mean nothing else will. Your career brought purpose and meaning to your life and it helped define who you are, but there are other ways to achieve those same objectives. Chances are you will land on something even more satisfying. How hard can it be to find something better than work?

"For decade after soul-crushing decade, they soldier on to feed their families and put a roof over their heads."

Medical Insurance

As chronicled in Medicare Explained, Medicare does not cover everything. And, with the exception of Part A, it isn’t free.You have to pay for Medicare Supplemental Insurance or Medigap which serves to reduce out-of-pocket expenses. Likewise, you need Medicare Part B to cover doctor visits and outpatient procedures. Then there’s Medicare Part D for prescription medications. When faced with these costs, some people keep working so they can remain on their employer’s insurance plan.


Finally, there are those who have always dreamt of doing something other than what they do for a living. For decade after soul-crushing decade, they soldier on to feed their families and put a roof over their heads. But all along their heart hasn’t been in it. A doctor who has always wanted to be a photographer, an attorney who longs to become a writer, an engineer who wants to be a business owner. When these folks retire, they see it as an opportunity to pursue their lifelong dreams.

Working in Retirement and Social Security

The headlines for clickbait articles warn of dire consequences for those who work in retirement: "You will lose your Social Security, your finances will go into a death-spiral, and you will spontaneously combust!" The logic behind such drivel makes no sense. It's like warning welfare recipients that their welfare checks will stop if they get a job.

As outlined in Social Security and Working, for those who work and collect Social Security benefits, the only period that may be affected is between age 62 and full retirement age (66-67 depending on when you were born). Once you reach full retirement age, you can earn as much as you want and it will not affect your Social Security benefits. Furthermore, Social Security benefits are only affected on a temporary basis. The moment you stop working your benefits return to normal. If your benefits are reduced, only a partial reduction takes place.

Finally, for those between 62 and full retirement age, no one says you have to take Social Security. You can wait to receive benefits as late as age 70, and the longer you wait the higher your checks will be.

Photo credit: Pixabay Eggstack News will never post an article influenced by an outside company or advertiser. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.
Eggstack founder, Financial Planning Association member, engineer, and software developer.