Working past 66 may not be everyone's idea of a dream "retirement," but for many baby-boomers, it could represent the future. A 2013 Wells Fargo survey showed that one-third of respondents expect to work until "at least 80" for lack of retirement savings. A steady paycheck means you have more time to save, and the nest egg you've accumulated can keep compounding, says Christine Fahlund, vice-president and senior financial planner at T. Rowe Price Investment Services. Other reasons to work past quitting time: You want to stay engaged by working part-time, or you're eager to start a new venture.

Judith Kennedy, a psychologist in Rapid City, S.D., retired from her private practice about five years ago, when her husband was diagnosed with dementia. "We wanted to take some trips on his bucket list while he could still travel," she says. Two years ago, when Kennedy was 68, her husband entered an assisted-living facility, and she restarted her practice, working about 20 hours a week. Kennedy uses her earnings mostly to finance trips; she visited China last fall. "I'm going to work as long as I have my health and can do something meaningful while also having fun," she says.

Kennedy represents a new trend: the revolving-door approach to retirement. A 2013 study by Merrill Lynch reported that 71 percent of pre-retirees want to work in retirement, but "most are seeking flexible work arrangements," such as working part-time or alternating between periods of work and time off. Ernestine Fickerson, 75, a travel agent in Ventura, Cal., took that concept to a new level. She spends months at a time working as a tour host on cruise ships (she gets the cabin free and covers other costs herself). At home, she works from one to eight hours a day setting up trips for clients, for which she gets a commission.

A few companies, including Abbott Laboratories, the pharmaceutical company, and Bon Secours Virginia Health System, headquartered in Richmond, offer formal programs that let employees work fewer hours, take longer breaks or phase out of current responsibilities and into mentoring roles. More often, the arrangements are informal, says Anna Rappaport, a consultant on retirement and benefits in the Chicago area. An employer may allow a senior employee to work fewer hours as an incentive to stay longer or offer flexible hours to all employees.

No matter what the setup, know the implications. Working fewer hours not only reduces your income but could also affect your eligibility for employee health benefits and the amount of your employer-provided life insurance.

(Jane Bennett Clark is a senior editor at Kiplinger's Personal Finance magazine. Send your questions and comments to moneypower@kiplinger.com. And for more on this and similar money topics, visit Kiplinger.com.)