The idea of retirement is exciting for some, and many people will need, or simply prefer, to continue working beyond retirement age. While some may need the extra income to supplement their retirement savings, others choose to do so for the sense of purpose and engagement it provides. Whatever your motivation for working during retirement, we’ve got some valuable tips to help you make the most of this new phase in your life.
- Delay Social Security: While you can start receiving Social Security benefits as early as age 62, it may make more sense to delay taking them until as late as age 70 if you continue to work. By doing so, your monthly benefit will increase, and it may avoid reductions due to other income sources.
- Watch Out for Tax Brackets: During retirement, you might have multiple income streams that can bump you into a higher tax bracket. This could make other income taxable as well. Stay on top of your adjusted gross income and the tax brackets and adjust your plans accordingly to minimize tax liabilities.
- Understand Health Care Options: When you turn 65, Medicare becomes an option for primary health insurance. If you continue to work, consider whether to stay on your employer’s health care plan, switch to Medicare, or opt for a combination of the two. Carefully review each option to ensure you have the necessary coverage.
- Calculate Work-Related Expenses: If you’re working part-time or with reduced hours, consider the cost of commuting, parking, and any other work-related expenses. Compare these costs to your extra income to determine if the benefits of working extra are worth the financial cost.
- Consider Downsizing or Relocating: Where and how you live can influence the type of work you can pursue during retirement. Downsizing to a smaller residence or relocating to a new area might open up new opportunities for work and lifestyle changes.
- Pursue Your Deeper Purpose: Embrace retirement as a chance to find work that brings joy and adds value to your life. Choose a job that aligns with your talents, interests, and experiences, and find a place where your contributions are appreciated.
Working beyond retirement age can be a rewarding experience, allowing you to stay engaged and financially secure. By following these tips and considering your unique circumstances, you can make the most of this exciting phase of your life. Enjoy the journey as you explore new opportunities and find fulfillment in your work during retirement. And if you need help calculating the pros and cons of your specific situation, reach out to us for assistance.