Here's a piece from MSN about the "fact" that people often work after retirement for reasons other than money. Here are the highlights:
According to a recent study of retirees sponsored by Putnam Investments, the Boston-based money management firm, one-third of the newly retired (with an average age of 61) returned to work after an eighteen-month retirement.
While collectively they do not earn or work as much as before ‘retiring,’ the working retired—which Putnam estimates at 7 million currently — said they were back in the workforce for the mental stimulation, physical activity, and because it kept them socially connected. More importantly, they saw it as the means to personal fulfillment. They now work because they want to rather than need to. They see their quickly ditched ‘retirements’ as the pause that refreshes—the golden retreat into the final phase of life still years ahead of them.
Though two-thirds of the working retired in the Putnam study insisted choice, not financial necessity, motivated their return, finances did play some part, according to Beth Segers, a managing director with Putnam in Boston.
My thoughts:
1. I'm sure mental stimulation is a reason some go back to work. There are only so many Oprah shows and re-runs on ESPN Classics that you can watch. However, in my opinion, money is a much bigger reason than the story lets on. After all, if you just wanted mental stimulation, why not volunteer for a non-profit organization or church? Or consult for free? The key lies in this quote:
"Though two-thirds of the working retired in the Putnam study insisted choice, not financial necessity, motivated their return, finances did play some part, according to Beth Segers, a managing director with Putnam in Boston. 'We asked respondents what they would have done differently if they could turn the clock back. The universal response? They wished they had pared back their consumption and saved more earlier, especially given fears for future health care costs.' "
Translation: "I'm rationalizing because I was such a spendthrift that I didn't save enough. But it's really the mental stimulation I want -- not the money." Yea, right.
Another key quote:
"The group was still pretty satisfied with their retirement lifestyle, at least enough so that reining in their current spending was not under consideration."
Since they don't want to spend less, they need to work to make up the difference.
2. That said, I do think that many people will take jobs in retirement that they prefer (doing something they like) rather than ones that pay well (like they have now). They won't need as much money (assuming they've saved a bit), so they'll have this flexibility.
3. The best option is to spend less than you earn now and sock it away for retirement (or move to Nicaragua), so you'll be able to do whatever you like in retirement. Here are a few of my posts that give you some guidance on this topic:
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