A Little More Gold in Your Golden Years – Working During Retirement
Financial Independence October 31, 2017
Some people live to work and others must work in order to live. Wherever you fall on the spectrum, if you’re over 65, US Social Security statistics indicate an average of 20 years of life yet to live. Two decades (or more) of retirement requires a healthy nest egg and investing in some good hobbies.
Whether for fear of outliving retirement savings or simply a desire to do something more than chase the grandkids or a little white ball, part-time work after retirement may be a good–or necessary–option.
And for good reason. Actually, seven:
- Income
According to Fidelity Investments’ annual survey, only 45 percent of Americans will be able to afford essentials such as housing, healthcare and food in their golden years. Working during retirement can help supplement your Social Security benefits, enable you to continue to save money and provide a better quality of life once you stop full-time work.
- Let the nest egg grow
The less you have to draw from your retirement savings, the more that remains in your 401(k) or IRA, enabling those assets to continue earning interest and/or dividends.
- More benefits
Medicare only covers a percentage of your medical expenses. Some large employers offer full medical benefits even for part-time employees, which may be better than Medicare or provide a valuable supplement.
- Less stress
Forget lying awake at night wondering where the next sale will come from, whether you’ll beat the deadline or if the client is happy enough. This is your chance to do something you love, or at least endure fewer sleepless nights when the stress isn’t full-time.
- Stay in the game
Post-retirement depression and anxiety is real. If you spend 40 to 50 years working, producing and functioning in a team environment, the psychological impact of a sudden stop can take its toll on your self-esteem. Continuing work, in whatever capacity, can ease the transition.
- Stay sharp
Let’s face it, when you have a work schedule to keep, it’s hard to forget what day of the week it is. Working in any job also demands some degree of problem-solving and other cognitive exercise. Like any muscle, as age advances, you must use your brain to stay sharp.
- Stay on purpose
Maybe you spent your career teaching, coaching, calculating, lawyering, cutting deals or whatever. Chances are you did it because that’s your gift. You can now pass on that gift to someone else, without dealing in all the politics of the workplace and the need to climb the ladder.
What About Collecting Social Security?
How a job affects your base benefits depends on when you start taking them. Although full retirement age might be 67, you can start receiving benefits at 62, even if you’re still working. However, if you elect to receive benefits prior to full retirement age, you may only earn up to $16,920 before Social Security deducts $1 from your benefits for every $2 you earn.
Once you reach 67, though, the limit goes to $44,880, and then $1 is deducted for every $3 you earn, and only from earnings prior to the month you reached full retirement age. Starting in the month you reach full retirement age, you can make as much money as possible without losing any benefit payments.
Whether you’ve reached the top of your career ladder and are looking for a less rigorous pace or need to climb your way out of a retirement savings hole, doing some part-time work through retirement can definitely add some extra gold to your golden years.
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