Should I keep working after retirement age?

While the dream is to hit retirement age, lie back, put your feet up and forget about work for the rest of your life, this isn't the case for everyone. We've talked before about the potential necessity for Australians to work beyond their retirement, due to numerous factors:

• inflation
• rising cost of living
• sudden, large health care expenses
• if your superannuation funds aren't sufficiently built up

Even if they don't necessarily need to, however, many Australians continue to work past the age they can stop working. According to the Australian Bureau of Statistics (ABS), the number of Australians aged 55 and over participating in the workforce has shot up by nine percent over the three decades to 2010. Much of this increase has taken place in the final 10 years of this period. Even those aged 70 or over saw a workforce participation rate of between 2.7 percent and 4.5 percent during this period. 

So it seems that Australians are increasingly deciding to keep working as they get older. The question is, should they?

The psychological aspect

Even apart from financial need, it seems many Australians elect to keep working past retirement in order to give themselves something to do. After all, the daily nine-to-five work grind also brings with it a sense of purpose and direction that, when lost, can be difficult to replace. 

A study carried out by CoreData on behalf of State Super Financial Services earlier this year demonstrated this very fact, as reported by news.com.au and The Mandarin. Surveying the views of 2496 public servants, it was found that only 20 percent wanted to stop working completely upon reaching retirement age, with more than two-fifths looking to take up full-time or part-time employment, or even start volunteering. 

Similarly, ABS data from 2009 shows that, while financial need is the most common reason for individuals to come out of retirement, 32 percent and 14 percent of women also cited boredom and lack of anything to do as a reason. 

Working after retirement can therefore serve two purposes. Not only will it fill your coffers further and boost your existing retirement savings, but it can also keep you active — mentally, physically and socially — plus make you happier, if the line of work you're in is something you enjoy.

What to know

If you're one of these individuals, you'll want to get yourself up to speed with all of the legal technicalities around working past retirement. 

It's possible to access your super while continuing to work once you reach your preservation age or turn 65. Depending on your particular superannuation rules, you may need to leave a particular amount in the account, or even invest it in a superannuation income stream product, such as an account-based pension. 

You might also want to keep in mind that there are a number of government incentives for those who work past retirement age and choose to stay in the work force. The Department of Human Services outlines the Work Bonus scheme, which increases the amount of money you can earn before your pension is lessened for those past the legal age, and the Pension Bonus Scheme. To be eligible for the Pension Bonus Scheme you must have registered before July 1, 2014. The latter gives a lump sum for those who don't immediately claim their pension, but unlike the Work Bonus scheme, you must register for it. 

All of this should help you make the decision of whether or not to work after you reach retirement age. 

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