Want a healthy, rich retirement? Keep working

Virgil Hermsen is 83, but he never really retired, even after selling his feed and grain business and closing his antiques store and furniture restoration shop.

Hermsen, of New Vienna, Iowa, now drives a school bus, tends bar one night a week and does some woodworking in his free time.

"I gotta stay active. I can't sit," he says. "Plus, the extra income don't hurt a bit. Social Security only goes so far."

Hermsen's story is common among people of retirement age. More than 50% of those age 60 and older plan to work at least part time in retirement, according to a new report by the Transamerica Center for Retirement Studies.

Some need to work for the money—28% of those in their 60s said they couldn't afford to retire—but 40% work for another reason: They enjoy it.

Larry McClanahan, a financial planner in Portland, Oregon, noticed this with some of his clients. One, a jeweler, returned to work at age 70, crafting jewelry part time for his former employer, McClanahan says. Another lasted a few weeks into his early retirement at age 62 before realizing he wasn't ready to quit working.

Benefits of a working retirement

There are obvious financial benefits to working in retirement, but there are other perks, too.

For Steve Bonine, 59, of Thornton, Pennsylvania, one of those perks is flexibility.

Bonine accepted an early-retirement package from DuPont after 36 years with the chemical company in various roles, including, most recently, manager of global grants and incentives.

He didn't skip a beat in "retirement," though. He immediately began working for Hickey and Associates, a global organization that helps companies choose new sites for their businesses and secure government incentives.

Although he works full time, he does so from home and only goes into the office for occasional meetings. In addition to the flexibility of telecommuting, this change gives his wife a chance to get used to having him around all the time.

"She wasn't really ready to have me home 24/7," he says, laughing. "So this is kind of a transition being able to work at home. I'm there, but I'm in my office, so I'm not in her way."

Easing into retirement is important not just for marital health, but for mental and physical health as well, says

Laura Scharr-Bykowsky, a financial planner in Columbia, South Carolina, who has seen this play out with her clients.

"When people just cold-turkey retire," Scharr-Bykowsky says, "they often have an increase in depression or problems with their spouse, or they gain weight."

A 2013 study by the Institute of Foreign Affairs, a London-based think tank, examined data from a survey of nearly 9,000 people ages 50 to 70 across 11 European countries.

Those surveyed were interviewed twice, the second interview two to three years after the first. Researchers looked at the changes in health between the two interviews.

Respondents who were retired at the time of their first interview were 41% more likely to later suffer from clinical depression. They were also 63% more likely to develop a physical condition, according to the report.

By contrast, those still in the workforce were far more likely to report their health as "very good" or "excellent."

'If you sit down, you rust'

That's part of the reason Hermsen wants to keep moving.

"I just feel like, if you sit down, you rust. Your veins block up. Your muscles weaken," he says. "I've watched too many who people retired at 65 and said, 'I'm not doing a darn thing,' and within two years, we bury them."

As with any muscle, the brain needs exercise, too. Staying engaged in part-time work can help keep it sharp.

More than 65% of retirees say not working speeds the decline of mental abilities, according to a 2014 report by Merrill Lynch.

Those considering part-time work should spend time thinking about what they like about working— socializing with co-workers, helping others, leading a team—and what they don't, such as paperwork or long hours, says Scharr-Bykowsky. This will help retirees hone in on what type of work will make them happiest.

"It's important to find that sweet spot," she says.

Clyde Jordan, 66, seems to have found it. After working as a veterinarian in Columbia, South Carolina, for 40 years, Jordan sold his share of the practice to his partner last year, with the agreement that he would continue working there part time for a few years.

Now, the day-to-day burdens of running a small business, such as bookwork, are off his plate, and he can focus solely on his four-legged patients.

The additional income also helps him feel more confident that he and his wife, a semi-retired real estate agent, will have enough money to do the things they want to do when they fully retire: traveling, boating, and maybe even taking their grandchildren to Disney World.

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