A growing number of older workers are choosing to retire later. There are many potential reasons for this, including the rise of remote work, changing views on the nature of retirement and financial stress that makes retirement unappealing for those who have saved too little.
Earning a paycheck for more years of your life undeniably has a positive impact on your pocketbook, as you don't need to rely on your savings as soon. You can also save more and potentially increase Social Security benefits in two ways. First, by delaying your start to benefits, and second, by boosting your "average wage" (used to calculate your Social Security benefits), especially if you're earning more on an inflation-adjusted basis than at earlier points in your career.
But what about the effect on your mental and physical health? Does staying on the job into the traditional retirement years improve your mind and body, or does the extra career stress and physical labor cause damage that could affect your future health and happiness? The good news, for women at least, is that recent research shows a longer working life may actually be helpful in slowing both physical and mental decline.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
Women in their 60s get significant benefits from being on the job
Thanks to changes in retirement laws in England, researchers have been able to develop a clear picture of the effects of working longer.
Increasing retirement age helped women's memory and health
Before 2010, women in England could retire and receive their state pension at age 60. Between 2010 and 2018, however, the female retirement age in England gradually increased to 65. As a result, about 1 in 10 women stayed in paid work for longer. Researchers realized that this policy change created a real-world laboratory to study the effects of paid work on women. They shared their findings in the journal Labour Economics.
Researchers discovered that "women who continue to work beyond age 60 have, on average, significantly better cognition and fewer signs of physical disability than had they retired at 60."
For example, working women aged 60 to 63 performed better on memory tests, recollecting 1.5 more words in a delayed recall cognition test. That may not sound like much, but it is similar to the gap between the richest and poorest women on the test. The longer-working women also showed small improvements on the immediate recall test, and verbal fluency increased by an average of six words per minute — a significant change, as the average fluency before the policy change was 23 words per minute.
Women enjoyed better memory regardless of their profession.
These positive effects were seen across workers in all professions, whether the women held white-collar or blue-collar jobs. But the most significant improvements were seen among single working women.
Women who continued working in sedentary jobs had worse physical health.
Women who worked additional years in physically demanding jobs experienced a health boost, increasing their average walking speed from 1 meter per second to 1.2 meters per second. However, women who worked additional years in sedentary jobs experienced a decline in their health; they physically slowed down, with an average walking speed of 0.3 meters per second less than at the beginning of the study.
With mental health and, in some cases, physical fitness improving due to delayed retirement, women and policymakers may want to consider health consequences when determining the optimal retirement age.
"Taken together, these results suggest that there are, on average, some health benefits of extending working lives, in addition to the increased earnings that such work brings. Such positive spillovers should be factored into policy analysis of changing retirement incentives," the researchers stated.
Furthermore, although this study focused on women due to the available data resulting from the pension reforms, there is little reason to suspect that the results wouldn't be relevant for both genders.
Why does working have such a big impact on mental and physical health?
Researchers stressed that since these changes occurred as a result of rules that delayed retirement by a small amount of time, it's likely that cognition and physical abilities can deteriorate quickly upon leaving work.
The reasons for this are simple: Leaving work changes both levels of physical and social activity.
Single women likely experienced the most significant cognitive benefits of continued work because they tend to live alone when they're older. By working longer, they benefit from social interactions at work. Likewise, those in physically demanding jobs must continue to move their bodies on the job, but if they retire earlier, there is no one pushing them to exercise.
For women who don't want to work longer, these results suggest that a proactive effort to increase exercise and maintain regular social connections will be essential to combat physical and mental decline. And for those on the fence about when to quit their jobs, the health benefits of staying may combine with the financial ones to convince you to delay giving notice.
Read More
-
The Savvy Way to Spend (and Enjoy) Your BonusUse your bonus to build wealth, boost savings and still enjoy a little well-earned fun.
-
Stores Open (and Closed) on Thanksgiving Day 2025From grocery stores to big-box retailers, here’s where you can shop and where you’ll find doors shut on Thanksgiving.
-
You Don't Need a Billion to Retire in the Hamptons: Finding the Right Town for Your BudgetYes, it's favored by the rich and famous, but retiring in the Hamptons may not be out of your league. Here's a guide to affordability and and who is happiest living there.
-
Is Fear That Social Security Will Run Out of Money Hurting You?Bipartisan collaboration on a mix of reforms will likely be needed to keep the system solvent and benefits intact.
-
Gen X Turns 60: It's Time to Remix Your Retirement PlaylistIf you want a worry-free retirement, you can't keep playing the same old song. You need to freshen up your financial strategies, as well as your music.
-
I'm a Financial Adviser: Here's How a Three-Part Retirement 'Crash Plan' Can Prepare You for Market TurbulenceHaving a plan ready to go when markets get wild — covering how you'll handle income, rebalancing and taxes — can be the ultimate retirement secret weapon.
-
Medicare to Cover Obesity Drugs Under Trump Deal for as Little as $50. What You Need to KnowTrump's deal slashes GLP-1 drug costs for Medicare beneficiaries and others, unlocking coverage for millions with obesity and related conditions.
-
Here's How to Plan This Year's Roth Conversion, From a Wealth ManagerWhile time is running out to make Roth conversions before the end of the taxable year, consider taking your time and developing a long-term strategy.
-
Four Times You Need a Second Opinion on Your Financial PlanIs your financial plan fit for purpose — or is your adviser peddling an outdated strategy? When you see these red flags, it's time for a second opinion.Evan
-
Cash In on Your Medicare Advantage Flex Card Perks Before They DisappearWith the 2025 rapidly coming to a close, here's how Flex Cards work and a guide on the best items to stock up on before December 31.
