Buy a mobile home and hit the road? To learn a new language? Work part-time? For a growing number of retired Americans, continuing to work makes perfect sense. Many simply find that they don’t know what to do to keep busy, while others miss the companionship and sense of purpose that work gave them. Longevity, combined with scarce savings, means that more and more people are staying at work longer. You can always find assisted living nearby to get better services in a short time.
On top of that, they have a good chance of living a long time. According to Rate.com, “Data from the Society of Actuaries (SOA) suggest that today, 65-year-old men in average health have a 35% chance of living to age 90. In For women, the odds are 46%.” So not working after retirement could mean living off your savings for 20 years or more. For some people that just isn’t feasible. In 2018, almost 29% of Americans between the ages of 65 and 72 were working or looking for work.
Regardless of the situation, working after retirement can be both financially and personally rewarding. Here are some things to consider when planning the next phase of your life.
If you’re like most retirees, you may have enough savings and retirement plan income to cover the basics, but you’ll also need to consider inflation, long-term care, and rising medical costs.
According to the Insured Retirement Institute, only 18% of baby boomers are confident that they will have enough money to live comfortably in retirement. However, that confidence increases to 45% if they own an annuity.
For seniors who haven’t saved enough, continuing to work may be a necessity. But even if it isn’t, having a salary helps complement and stretch those savings to face a long life that many expect.
Working in retirement means it’s possible to put away the savings you already have — and continue to earn interest — while living off your extra income. Also, pension benefits earned through your former employer will typically not be affected unless you consider returning to work for them.
Social Security Rules for Retirement and Benefits
If you retire and start receiving benefits before your full retirement age, as defined by the Social Security Administration, your Social Security benefits could be reduced by up to 30%, depending on the year you were born.
By working full-time or part-time, you can delay the start date for the payment of your social security benefits. The longer you wait — until you reach age 70 — the larger your monthly social security check will be.
However, if you are already receiving Social Security benefits and decide to go to work, keep in mind that in 2020 if you earn more than $18,240 before your full retirement age, $1 for every $2 you earn will be deducted from your Social Security benefit. Social. In the year you reach your full retirement age, Social Security will deduct $1 for every $3 you earn after $48,600. Only earnings received up to the month before your full retirement age will be counted, not later. For more information, visit ssa.gov.
When you reach your full retirement age, you can work as much as you want without affecting your Social Security benefits. However, you should consult your tax advisor regarding the tax consequences such employment arrangements may have on your Social Security benefits.
Eligibility to receive health insurance benefits
For many senior retirees, the high cost of health care can have a pretty big impact when they no longer participate in a company health plan. This is especially true if you retire before age 65 – the age at which you qualify for Medicare benefits.
When you qualify and begin receiving Medicare benefits, you may have significant out-of-pocket expenses, including those related to prescription drug costs. Even after you turn 65 and qualify for Medicare benefits, it may help to have additional health insurance through your employer or Medicare supplement insurance, as Medicare coverage may be insufficient.
Having a job that pays medical benefits after you’ve retired could save you thousands of dollars a year in medical expenses.
Social activity and health benefits
Exercising, reading, and doing crossword puzzles may provide the necessary stimulus to help maintain physical and mental health, but working is also a great way to keep busy.
People who work after retirement often remain more active and socially connected, which can translate to better overall health and fewer medical problems. Working part-time can make you feel like you’re a part of something, without being tied to a career and long hours of work.
a second calling
Retirement can be the start of a whole new career, but it doesn’t have to be the same old job. Many seniors thrive in a second vocation, and this can provide them with a second chance at job satisfaction.
Pursuing a second vocation can open up exciting opportunities that weren’t practical earlier in life, whether it’s working to support your favorite cause or even channeling your passion for service into your own small business.
Tip: If you plan to work in retirement, start looking for a job or finish your job before you retire. You can also sign up for one or two courses to learn new skills.