The Benefits of Working After Retirement

As my official retirement date (31.12.25) is fast approaching, I was curious to find out how many people, such as myself, are continuing to pursue some gainful employment, part- or full time, while drawing a pension. And it probably won’t surprise you that the ranks of employed pensioners are growing.

In Switzerland a Swiss Life (an insurance company) study from 2024 found that about 25% of people are working beyond their reference retirement age of 65 years for men and 64 years for women.  In some OECD countries, approximately 21.7% of people aged 50-69 worked in 2023 while receiving pension income (pension ages vary by country and occupation). And while the proportion of working retirees is on the up in the OECD, it stagnates in Switzerland.

After working for many decades (in many cases, including mine, more than 40 years), why would anyone not want to sit back and finally relax? To start with, work can provide identity, structure, and meaning. Many older workers enjoy staying engaged. For some work is their main social environment. Continuing to work helps prevent isolation. And last but not least staying active — mentally and physically — can improve health outcomes: Some studies show that working (especially part-time or flexible hours) can help maintain cognitive function. Moreover, in many countries, there are labour shortages, especially in skilled jobs, while flexible or hybrid work has made it easier for older people to continue maintaining some form of economic activity.

Of course, working when others enjoy their well earned free time, I and my active fellow pensioners will have to consider a number of drawbacks: Work can bring physical strain, long hours, or mental stress, and older workers may find it harder to recover from fatigue or pressure. Also balancing work with managing age-related health issues can be difficult. I know myself a couple of cases in my immediate family where the person, just after having finally fully retired, is starting to suffer from health issues. Some people regret “working too long” after health changes occur.

Oldies who work beyond their retirement frequently report feeling useful, having structure in their day and contributing their skills. They often describe work as giving them meaning they would miss otherwise. They also say they enjoy more social interaction and mental activity.

And then there is the extra income of course, which is not to be sneered at – and often even vital. In the OECD pensions equate to about 60% of an employee’s last salary. However, looking particularly at Switzerland, replacement rates (the percentage of your pre-retirement income that you receive as a pension after you retire) have dropped: for someone earning CHF 100’000, the replacement rate is now some 51%, and for CHF 150’000 income, it’s around 42%, according to recent reports, because pension ceilings notably of the state pension as opposed to the occupational pension cap benefits.

Last but not least the economy benefits too! With developed countries ageing rapidly, older and more experienced workers mentor younger employees, help avoid knowledge gaps and ensure continuity in complex roles. The key is offering flexible, age-friendly work so that people who want or need to work can do so sustainably. True, people working beyond retirement might fill a role which otherwise could have gone to a younger candidate, however, studies generally show this effect is very small — labour markets are not zero-sum.

So, come January, I will retire, sort of, handing over the operational responsibility of my projects to my colleagues. I will, however, stay involved in the steering of said projects and take on a couple of new ones at the specific request of the clients. So not quite riding off into the sunset yet, but I look forward to having more free time, not least to write my blog and spend time with my wife. You will have to ask her if she feels likewise.