We all know what retirement is supposed to look like: You get a nice farewell luncheon and a gold watch from your employer — and then you get busy golfing, traveling, spoiling the grandkids, and generally living it up in your golden years.
So if you find yourself with an underfunded nest egg and the realization that you have to continue working in retirement, you can be forgiven for wanting to throw an epic temper tantrum. Working in retirement is not what we were promised, and if that doesn’t warrant some flailing and crying, I don’t know what does.
But not being able to fully retire doesn’t have to put you in a permanent bad mood. Once you’ve stopped shaking your fist at the heavens, consider these ways to not only accept, but also embrace the reality of working in retirement.
1. You may be happier than retirees
Though it might seem like retirement is the key to happiness, psychological researchers have found that working is actually better for your subjective well-being. According to a 2014 study by Dr. Elizabeth Mokyr Horner in the Journal of Happiness Studies, retirees do experience a rush of well-being and life satisfaction in the first few months after they retire — but they feel a sharp decline of their levels of contentment within the first few years of retirement.
There are a couple of reasons for this decline in happiness. First, anything you spend years planning for is unlikely to live up to your expectations. It’s only natural for retirees to feel let down when they realize their new chapter in life isn’t exactly what they expected. In addition, when you end a career that has helped define who you are, it’s common to feel adrift once that career has ended. Finally, retirement can often lead to a shrinking social circle, since you no longer see co-workers on a daily basis. Lack of social contact can increase feelings of loneliness and depression, which can be a major problem among retirees.
Even if you are not happy about the fact that you have to work past retirement age, remember that working may actually be improving your happiness by helping to define you, giving you a broader social circle, and providing you with a reason to get up every morning. (See also: How to Find Your New Identity After Retirement)
2. You can make your workplace better
One of the benefits of working past traditional retirement age is the amount of knowledge and experience you bring to your job. Not only does that make you a valuable member of your workplace, but it provides you with an opportunity to help encourage and shape the culture there. By taking younger co-workers under your wing and making suggestions based on your depth of knowledge, you can potentially improve the company you work for. It’s tough to do this without the kind of clout your experience lends you.
3. You can put off taking Social Security
According to the Center for Retirement Research at Boston College, approximately 42 percent of men and 48 percent of women begin taking their Social Security benefits at age 62, the earliest you are eligible to receive them. But Social Security benefits are permanently reduced by up to 30 percent by taking them so far in advance of full retirement age.
If you are still working in retirement, you can put off taking your Social Security benefits, and thereby increase your monthly benefit by as much as 8 percent per year that you put off Social Security. In addition, you may also be increasing your Social Security monthly payment by continuing to work, since the Social Security Administration calculates your benefit based on your 35 highest earning years. If you are at the top of your lifetime salary while working past retirement age, these high earning years will replace lower earning years from your youth — and potentially increase your monthly payment. (See also: 6 Smart Ways to Boost Your Social Security Payout Before Retirement)
4. You are in a retirement investment sweet spot
Though working past retirement age may not be your idea of fun, it does give you an unparalleled opportunity to invest. First, since you are over the age of 50, you can take advantage of the catch-up provisions that allow you to contribute up to $24,500 to your 401(k) and up to $6,500 to your IRA, allowing you to reduce your tax burden while funding your retirement accounts.
In addition, since you are working longer, that means you have a longer investment timeline to play with. This can allow you to invest for growth in ways that a typical retiree could not, since she would be trying to protect principal. Since you anticipate working for a few more years, you get a few more years of the magic of compound interest working to build your wealth. (See also: 7 Reasons to Invest in Stocks Past Age 50)
5. You can keep using your employer’s health insurance
All Americans are eligible for Medicare as of age 65, but the program costs more than you might expect and covers less than you might think. Not only do you have to pay a premium of at least $134 per month for Medicare Part B, but you will be on the hook for 20 percent of the Medicare approved amount for health care after you have met the annual deductible of $183. In addition, Medicare does not cover prescription drugs, dental or vision care, foot care, hearing aids, or dentures.
Being able to stay on your employer’s health insurance could be a major benefit to working, since you are likely to have more comprehensive coverage under that insurance and it may be less expensive for you, as well. (See also: 4 Common Mistakes to Avoid When You Enroll in Medicare)
No need to curse the heavens
Working in retirement may not be what you planned, but it doesn’t have to feel like the end of the world. If you take the time to recognize how working in retirement can actually help your emotional, mental, financial, and physical well-being, you can embrace the reality of working when you’d expected to be golfing.