To work or not to work after retirement

Cost of living pressures and rising inflation combined with declining superannuation returns mean more retirees could soon be returning to work.

Research carried out by National Seniors found 16 per cent of age pensioners re-entered the workforce after initially retiring, while another 20 per cent said they would consider returning to work. But it might not be only a need to work that is leading seniors to consider working; additional income, particularly to top up a pension cheque, can also help pay for home improvements, holidays, social activities such as dining out and staying active, and reduce the drawdown of superannuation funds.

For pensioners, recent changes to the Work Bonus limit have also provided an incentive to take on more part-time work without it affecting Centrelink payments.

But it turns out that there are quite a few reasons why people consider working after retirement, beyond just financial circumstances.

Some people experience a loss of identity or purpose without a job or routine and miss the social interactions with co-workers or clients that a job once gave them. Some people just really liked their job and feel they would still like to contribute in their field. Others may finally want to pursue a passion for something new. Retirement doesn’t have to mean volunteering is the only option.

Whatever the reason, studies have shown that returning to work after retirement, especially after 65, does offer some health benefits. Harvard Medical School, for example, has reported that long-term studies have shown that working even one more year beyond retirement age was associated with a nine to 11 percent lower risk of dying, regardless of health; that people who worked past age 65 were about three times more likely to report being in good health and about half as likely to have serious health problems, such as cancer or heart disease; and still others have linked working past retirement age with a reduced risk of dementia and heart attack, as well as a reduced risk of elderly depression and other problems associated with loneliness.

In Australia, there is no requirement to stop work once you reach retirement age, even if you have already accessed your super or are receiving Age Pension payments. According to superannuation specialist Chris Strano the only rules for working after retirement are that you need to ensure you are not in breach of superannuation rules if you plan on accessing your super before age 67. In fact, you can begin a transition to retirement plan to access a portion of superannuation from age 60. Apart from that, there is no restriction on you working after retirement and, if you are on a pension, make sure you are fully aware of the earning limits before any extra income will affect your pension payments.

Otherwise, Strano, the founder of online financial planning site SuperGuy.com says: “If you work after retirement, you will earn more money, presumably need less (or none) of your super and investments to cover living expenses and possibly even be building up more of your retirement nest-egg.”

In the end, the most important things to consider about working after retirement are how it affects your mental, physical and financial wellbeing. Is work a form of healthy exercise? Is it a form of easy additional income? Or is it a cause for stress at a time when you’d rather be enjoying more time with friends, family and grandchildren?

Only you can know whether it’s right for you.

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