For most people, retirement brings to mind images of beaches, hammocks and long days devoted to hobbies instead of work.
In fact, more work is probably last on the list of concepts associated with retirement. Or is it?
A survey by Consumer Reports found that the overwhelming majority of people close to retirement actually expect to keep working in some capacity after they’ve officially “retired”. From Consumer Reports:
Eighty-three percent of pre-retirees in our survey expected to work full- or part-time.
The phenomenon of a gradual retirement isn’t so new. Each year since 2007—before the economic downturn—about a quarter of our fully retired respondents have reported starting their retirement by working less, not stopping entirely. They reduced hours at their main job, worked part-time at a new one, or started a business. They worked for a median of four years. The most satisfied partly retired respondents worked 9 hours or less per week.
Laboring longer provides more income and delays when you begin withdrawing from savings, allowing more time for growth. And for many, it keeps those synapses firing.
It’s interesting to note that although 83 percent of respondents said they expected to keep working, past data from the same survey shows only 25 percent actually do.
Perhaps part of the reason for that disconnect are the implications that working has for other retiree benefits—sometimes, more work means less Social Security and pension benefits:
If you haven’t reached full retirement age but have claimed your benefit, Social Security holds on to $1 for every $2 you earn above $15,480. When you reach full retirement age, it gives that deferred amount back, adding to your monthly benefit.
Working shorter hours at the same employer could affect pension benefits or employer-based group health insurance, so check with human resources before you commit to part-time work.
The survey data is part of a larger piece over at Consumer Reports about how to “Stop Freaking Out About Retirement”. It’s worth a read.