Retirement

Why Do Some People Choose to Work Past 70?

While most people consider 65 the ideal retirement age, others are reaping both financial and personal benefits from working past 70.
Why Do Some People Choose to Work Past 70?
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Guest Writer
Founder & CEO of Real SEO Growth
5 min read
Opinions expressed by Entrepreneur contributors are their own.

By the time they celebrate their 30th birthday, many people are already thinking about retirement. They put in long hours, they forgo vacations and they don’t see their family as much as they would like. Work? It's a necessary sacrifice for many. A sacrifice that not all of us can easily part with. 

Related: How to Pay Zero Taxes Legally in Retirement

The reason, of course, is retirement: Most people put a great deal of energy into saving for it. They work odd hours, plan carefully and stick to (strict) saving routines. Despite these moves, a recent CareerBuilder study showed that 40 percent of U.S. workers surveyed didn't think they could retire by 70. Reading this, I couldn’t help but think, “Is it really that bad?”

And, who said you have to retire by the time you’re 70 anyway? 

In fact, some people have chosen to remain optimistic about their longevity and work well beyond “typical retirement age” (65); that way, they know they'll enjoy the associated benefits and  have time to truly relax once they do retire. For those of us who wonder what benefits they're thinking about, studies and recent findings have revealed the actual advantages that working later in life can bring.

“With workers staying in their jobs longer, employers are adjusting hiring needs, but also reaping the benefits of the extra skills and mentoring abilities of mature employees,” Rosemary Haefner, chief HR officer at CareerBuilder, told HR Watchdog.

Of course, "mature employee" could be anyone past, say, 55. But what would a worker gain by staying past 70? While Americans' life expectancy has dropped for the second year in a row, we’re living longer than we did in the 1990s, for instance. Apart from older workers possibily enjoying the opportunity to share their skills and mentor young minds, there are several more reasons why some people find it beneficial to work past 70.

1. Health benefits

Did you know that working longer might actually prolong your life? A study conducted by Oregon State University showed that working past the age of 65 can help you live longer.

The OSU researchers found that working just one extra year (to 66) gave healthy adult respondents an 11 percent lower risk of death from all causes, including demographic, lifestyle and health issues. Not to stop there, the study also warned that retiring early might be a risk factor for early death. Wow!

Related: Precisely Following This Savings Plan and You Can Retire in 15 Years

For many Americans, the reason to work isn’t tied only to monetary gains. Work is a social outlet where adults meet like-minded people and people they share interests with. At the very least, work helps them maintain their professional strengths, leaving them more psychologically energized than than they might be otherwise.

On the other hand, for those who leave work earlier and can’t comfortably fund post-retirement recreational activities, boredom may become their cruel companion, due to a lack of money to travel, pursue hobbies and mingle at places that take their minds off things. Activities like these are benefits people can enjoy for free as long as they work -- the exercise connected to job commuting being just one more. 

So, the next time you think you’re too unhealthy to work longer, maybe give it a second thought. The OSU study found that even adults who described themselves as unhealthy were likely to live longer if they stayed at work.

2. Social Security benefits

Want to make the most of your Social Security benefits? Work longer, Maurie Blackman has said on The Motley Fool.

For every year you delay Social Security, Blackman says, you increase your benefits by 8 percent until you reach 70. This means that if your retirement age is 65 and you decide to delay leaving work by five years and don't collect social security until age 70, you’ll have increased your total benefits to 140 percent of what you would have gotten at 65.

You can also start Social Security at age 65 even as you continue working and still see your benefit check  rise (albeit at a lesser rate) because of that Social Security contribution still coming off your paycheck.

On the other hand, retiring before full retirement age cuts your benefits by almost 7 percent for the first three years, after which the rate goes down to 5 percent.

3. A bigger nest egg

As a general rule, most financial planners will recommend that you save enough to last 25 years after retirement. Meaning, if what you have left after spending your income (including Social Security and pension) is $30,000 per year, the rule suggests that you put away $750,000 for your retirement.

Some workers, even after reaching their recommended target, decide to save even more. Those who decide to keep working after their retirement age point out the desire to build a bigger nest egg as their main goal. For instance, by working longer, not only do they postpone using their savings, but they also keep fattening the account. And, even if they don’t manage to save a penny more, the account still gains from tax-deferred growth.

For those who have an active pension, working longer has an added advantage. Organizations calculate pension amount based on the pay and years of service. Some base it on the past couple of years while others base it upon the entire time you’ve had the plan.

Related: 10 Flaws of Conventional Retirement Plans

Either way, working longer typically grows the pension amount.

In conclusion

While most people believe retiring before 70 is ideal, these are some of the benefits that may make a worker think twice about early retirement. Will you be working past 70? It’s time to enjoy the silver lining.

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