Why Working Past 65 Can Be Doubly Rewarding
Aside from making for an easier transition, the financial benefits of stretching out your working life with part-time work or a lower-stress job after you retire can really add up.


The typical retirement plan devised by a financial adviser will call for you to manage your investments in stocks, bonds and cash so that they last through your projected life span.
I agree that you need to create a plan to manage your investment assets, but I also remind people entering the retirement zone to consider their other assets and resources: Your house, income annuities … and your ability to continue to work.
At age 65, you have worked 40 years or so and have amassed savings that you will use to finance your retirement. For many people, that amount of retirement savings plus Social Security might enable you to replace, say, 60% of your current income, forcing you to consider downsizing your home or lifestyle.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What if you could find satisfying work, either full time or part time, for the next five years? You might be able to retire on 80% to 90% of your final pay instead. In addition, you may be able to explore a field you were always interested in, meet new associates at work, or just keep your mind active.
The benefits, both financially and emotionally, of those last handful of working years is tremendous.
The financial benefits of work
- Continuing to receive compensation, salary or consulting fees will help you postpone the start of Social Security payments, perhaps to age 70. That’s the longest you are allowed to wait to earn the most possible in delayed retirement credits. The government adds an 8% bonus to your annual payments for each year you delay beyond your full retirement age. It could add up to 32% more Social Security income.
- By generating cash flow from your work, you can delay the drawdown of retirement savings or receipt of income from an annuity. That could mean another 25% to 30% of income from this source.
- During these extra earning years, you can contribute to your 401(k) or other retirement savings vehicles. Using the tax law’s catch-up provision can be particularly helpful. Adding that to your existing retirement savings will provide a real boost to your income.
The combination of all of those factors translates into healthier retirement savings and larger monthly payments in retirement.
Filling an income gap from other resources
What if you can only find part-time work, or your full-time work pays you less than your previous employment and you need to stretch your income just a bit further until you start taking Social Security benefits? This is a time when smart retirement income planning is critical.
Your house can provide monthly checks to make up a short-term shortfall, through a reverse mortgage or a home equity line of credit. Consider getting approval for one of those at around the time you retire from your longtime job. Even if you decide not to activate payments, the availability of house-based income will provide peace of mind.
You have many options to turn your savings into income annuities, as well, which will provide lifetime guaranteed income. You would need to annuitize only a portion of your savings to fill the gap of post-retirement work wages.
Who will hire me?
I wouldn’t worry too much about whether you will be employable. With the increase in Boomer retirements, I believe there will be a shortage of qualified knowledge workers across the business spectrum. You can decide whether to work full- or part-time, and whether to stay in your field or branch out to something new. Maybe you will have more opportunity to work from home, take vacation time when you want it, or not get as upset as you used to when the boss starts to rant.
Brian Drum, president of Drum Associates, a leading executive recruiting firm in New York, told me that as more companies accept the “mobile workplace” and a shorter workweek, there will be increasing demand for knowledge workers to fill the void. In addition, with low unemployment rates in general, finding full-time replacements will be difficult. This offers a unique opportunity for retirees to start their second career without having the demands full-time hours and commuting.
“A first step in this process for new retirees is to get their skills organized and inventoried and to update their résumés,” Brian told me. “Most retirees have a wealth of untapped know-how.”
Take your time
One of the best things about working past traditional retirement age is time: If you feel you haven’t saved enough, you have time to make it up. If you haven’t worked out all the details of your retirement income, you have time to do so. You don’t have to rush into decisions because you have stopped working and your income is about to fall off a cliff. Instead, you can give yourself the opportunity to create a more secure financial future for yourself and your family.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Jerry Golden is the founder and CEO of Golden Retirement Advisors Inc. He specializes in helping consumers create retirement plans that provide income that cannot be outlived. Find out more at Go2income.com, where consumers can explore all types of income annuity options, anonymously and at no cost.
-
Over 50 and Still Paying Student Loans? Here's Some Help
It's the club no one wants to join. But if you are over 50 and still paying student loans, there are ways to tackle both debt and retirement savings.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)
Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)
Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your Business
Selling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key Pieces
If retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?
If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or Relocate
Homeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and Friends
What starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
What the HECM? Combine It With a QLAC and See What Happens
Combining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.