1 in 5 Americans of Retirement Age Still Works. Should You Be Working, Too?

When an older relative of mine turned 65 last year, he threw a party to celebrate not just that milestone birthday, but what he thought was his permanent escape from the workforce. After a long career in financial services, he was burned out and ready to stop working for good. And since he was eligible for Medicare and comfortable with his savings, he felt ready to take that leap.

Now, about 12 months later, he's consulting in his former field and playing in a band. And while their gigs are pretty sporadic, they're looking to ramp up.

Image source: Getty Images.

Financially, my relative is fine. He has enough savings that he hasn't even thought about claiming Social Security yet. And his expenses are fairly low given that he downsized his home in conjunction with retiring.

But he insists that working on his own terms is a good thing for him later in life. And you may find that the same applies to you.

A common trend

Pew Research Center data found that as of 2023, 19% of Americans aged 65 and older were working in some capacity. And you should know that there are benefits to working later in life that aren't just financial.

Of course, it's worth noting that Social Security only pays the average retired worker about $23,000 a year. So for those without much savings, holding down a job later in life may be a necessity.

But in the case of my relative, money wasn't the issue. Rather, he found that he just didn't have enough interesting things to do with his days once he stopped working on a full-time basis. And it was starting to take a toll on his mental health.

His physical health suffered, too. In a recent conversation, he admitted that this past winter, he would go days without leaving the house simply because he had nowhere specific to go and didn't feel compelled to face the cold. Instead, he sat home watching TV, eating, and repeating that cycle until he noticed a small gain in weight.

By the spring, he'd had enough. He took on a couple of consulting projects that he was mostly able to tackle from home. That helped fill some hours in his week but didn't solve the problem of not leaving the house. He craved social interaction and wanted a reason to get in the car and go somewhere other than the grocery store.

He reached out to a few friends he used to get together with to talk about forming a band. A few weeks later, they had a social media page, a website, and a regular practice schedule. They played their first gig at an outdoor restaurant over the summer. And while their take was barely enough to cover their bar tab afterward, it wasn't about the money. It was about having a purpose and something to do.

Don't assume you shouldn't work once you get older

If you end up mostly retiring on Social Security, you might have to work when you're older. But even if you're perfectly comfortable money-wise, you may find that working gives you a reason to get up in the morning and an opportunity to talk to other people. A job might spell the difference between spending the day sitting on your couch or going out and moving your body around.

So don't write off the idea of working once you reach retirement age. You don't have to keep plugging away at a full-time job that's stressful. And you shouldn't do that if you have the savings to leave that situation behind.

But you should consider finding a balance, whether it's consulting a bit in your former field or embracing a totally new type of job that's enjoyable or meaningful in some way. It could end up being one of the smartest decisions you'll ever make.

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.