Maybe retirement sounds like an endless vacation. Or perhaps you’re hoping it’ll be a relief from the pressures of working and supporting a family.
Whatever you imagined for your retirement, there may be good reasons to continue working even after you hit that magic age. You don’t have to continue working long hours; it may make more sense to work part time or to offer consulting services. But continuing to work leads to benefits in many areas, which makes it an option worth considering.
Financial Health
Some people simply don’t have enough savings to leave the workplace completely at age 65. If this sounds like you, you aren’t alone. In fact, with rising inflation and financial uncertainty today, more than 60% of Canadians are delaying their retirement.[1]
The good news is, continuing to work now will only create more financial security later. Not only does continuing to work mean you aren’t starting to rely on your savings, but it may mean you can even continue to save. In fact, you can contribute to an RRSP until you’re 71, which means your employer may contribute as well (increasing your savings) and managing the funds will cost less (because fees are shared among all employees).
Physical Health
Studies have shown that people who continue to work past retirement age are more likely to report being in good health and avoiding chronic or serious health problems.[2] There are a variety of reasons for this: a sense of purpose, continued physical activity and stronger relationships with acquaintances, to name a few.
In addition, those who continue to work may have access to better health and dental benefits than those who don’t. Employer-sponsored health plans generally offer coverage for prescription medications, dental appointments and paramedical professionals, such as physiotherapists and speech or occupational therapy. Delaying your responsibility for footing these bills means more money later.
Mental Health
Some people do well in retirement: they call the shots, they make the schedule. Others find retirement leads to a struggle with anxiety or depression.[3] They may need routines and outings to maintain a positive outlook. Continuing to work provides that structure. Those who have a strong work ethic and who flourish in team settings may find they just miss the workplace.
Beyond that, it’s an opportunity for an encore career or a chance to give back. Whether you’re mentoring younger workers to help them grow or starting a new venture you never had time for before, working provides many people with a sense of purpose and meaning that is required for a successful retirement – and a happy and healthy life.
Social Health
Isolation is a major problem among older Canadians.[4] Those who live alone, away from children and other family members, may not have a sense of community for support or as many opportunities for social interaction. In a worst case scenario, they may feel like their life has no purpose. These feelings can be even more acute among people with health problems.
Yet those who work experience less of this. Working provides an opportunity for regular social interaction, whether among coworkers or clients, and it requires no entrance fee. It also helps keep your mind sharp and your brain active, both of which contribute to maintaining cognitive skills. Working often gives you a sense of being part of a team, providing purpose and community at once.
Of course, continuing to work after retirement age may impact the government benefits you are eligible to receive, so consult with your advisor before you make the choice to keep working.
[1] Financial Post, “Anxious Canadians putting retirement on hold as inflation makes everything more expensive,” November 16, 2022.
[2] Harvard Health Publishing, “Working later in life can pay off in more than just income,” June 1, 2018.
[3] National Council on Aging, “How Common is Depression in Older Adults?” April 26, 2022.
[4] Government of Canada, “Report on the Social Isolation of Seniors,” accessed December 15, 2022.