When you think of retirement, maybe you picture relaxing on a far-off beach or simply curling up on your couch with the latest novel. But since retirements today are lasting longer than ever—many retirees are rethinking the idea of 30 years of leisure. Not only might it become tedious, it may not be financially sustainable. A recent 2021 survey found that 71% of workers age 50 or older are planning to keep working into retirement.Disclosure 1 Even those with substantial investment portfolios may opt to keep working—at least for the first few years of retirement.
“They don’t want to be on the front porch swing; they want to stay busy,” suggests Shelley Cairo, a Bradenton, Florida-based financial advisor for Truist Investment Services.
Consider this an opportunity to try your hand at an encore career—a term used to describe a second work life that combines personal and social meaning—along with a paycheck. Let’s quickly look at a few of the benefits you can expect to enjoy if you decide to pursue a second career.
1. A bigger bank account
Money may play a key role in deciding whether you’ll continue to work during retirement. Review your projected income, expenses, and assets to see if you’ll have enough to comfortably support your lifestyle for a 30-year retirement. (Don’t forget to factor in inflation!) If you’re concerned about falling short, working in retirement could generate the extra income you need to close the gap.
A retirement job may allow you to decrease or even discontinue withdrawals from your investments—giving them the opportunity for continued growth. “We talk about Social Security, pensions and investment accounts as the three legs of the stool when it comes to retirement,” notes Cairo. “For many, a second career becomes a fourth leg for added support and stability.”
2. A new passion or a return to an old one
With a lifetime of experience behind you, you have a lot of wisdom to share with others. An encore career can be an opportunity to give back to your community. Many retirees choose a second career in their field, but take on a different role with reduced hours and less stress. For instance, Cairo cites the example of a lawyer who now does part-time mediation.
On the other hand, you may want to change fields entirely. An encore career can be your ticket to pursue a passion you’ve only dreamed about—while also generating extra income in the process.
3. Better health
An encore career can be a way to give yourself purpose while keeping both your mind and your body active and engaged. Plenty of research shows that keeping your brain active helps protect against some aspects of cognitive decline as you age. And physical activity—anything that gets you out of your chair—helps maintain strength and stamina. “As a society we’re more mobile than ever,” points out Cairo. “People are used to being active and on the go, and they don’t want to give that up; even in retirement.”