Many people choose to continue working in retirement either to supplement their income, or simply to keep themselves busy and active. Should you choose to continue working, there are a few things to be aware of.
Income Limits in Retirement
According to the Social Security Administration (SSA), income limits apply to Social Security Benefits for people who are not yet at full retirement age. The full retirement age of which you can retire and get 100 percent varies depending on the year you were born, typically ranging between 65 and 67.
If you have not yet reached full retirement in 2018, annual earning limits are $17,040. Any earnings above that amount will result in a decrease in your monthly retirement benefits.
For those who will reach full retirement age in 2018, limits on earnings in the months leading to that date are $45,360. For this purpose, the SSA only considers earnings for the one month before your full retirement age.
This includes income from the following:
- Profits for self-employed workers
- Vacation Pay
It does not include income from the following:
- Earned interest
- Investment income
- Military retirement benefits
- Other government benefits
- Veterans benefits
Once you reach full retirement age, you have no limits on your earned income and will continue to receive your full benefits.
Opportunities for Generating Retirement Income
Generating income during retirement is more manageable than you might believe. Most retirees do not need to rely on a full-time salary. In fact, some are only looking to supplement their incomes, make their funds last longer, or afford a few desirable luxuries. That means you do not need to embark on a new career to make ends meet, but you could enjoy a nice part-time job or turn a hobby into a little extra cash. These are a few ideas you might want to consider for retirement income.
- Become a consultant by leveraging your years of prior experience.
- Drive for a car share service such as Uber or Lyft.
- Find a job for fun (become a golf pro, work in a wine shop, get a job at a community museum, or teach art classes).
- Invest in real estate.
- Get a position in retail sales.
- Start your own business.
- Teach community classes.
- Obtain temp work through staffing agencies.
- Become a maintenance worker at a camp or RV park.
There are endless opportunities to earn money during retirement to supplement your income or fund your dreams.
Benefits of Working in Retirement
The benefits of working in retirement are far more than financial. While some people initially decide to work during retirement for economic reasons, many keep working throughout retirement for reasons that are deeply personal. These are just a few benefits you can experience by working during retirement.
- Allows you to try a new line (or lines) of work.
- Potentially better health coverage than Medicare provides (and often at lower premiums).
- Helps you stay physically active.
- Keeps you socially active and meeting new people.
- Sharpens mental faculties because you are constantly learning new things.
The bottom line for some people is that they enjoy working and wish to continue doing so.
Of course the financial benefits should not be discounted or ignored. Supplementing your retirement income allows for the following scenarios:
- Boost your Social Security benefits. Delaying the receipt of Social Security benefits boosts those benefits by eight percent per year from the time you reach full retirement age until the age of 70.
- Reduce the number of years you need to draw from your savings.
- Opportunity to increase your retirement savings by adding to it.
- Larger pension if you work for an organization that still offers them and you remain in your position rather than taking a new one.
The decision to continue to work and delay retirement, work during retirement to supplement your income, or just enjoy being retired, is up to you. Only you know what is in your best interests.