Those who find retired life boring may look for a second, often smaller career in order to keep busy and continue to support themselves. However, there are both risks and benefits to working after you’re retired or reached retiring age.
Working after the legal retirement age will increase your social security benefits later on, and can provide needed structure and socialization to your day. However, you’ll need to be careful about budgeting and pension plans.
Continue on to dive deeper into the benefits and considerations you should keep in mind and things you may want to know before taking on another job after retiring.
One big factor in retiree’s incomes is the social security they receive, a service provided by the federal government. This money comes as a monthly payment to help folks who don’t have another source of steady income pay their bills and get food on the table.
However, if you work again after retiring, your social security will drop, considering you now have another source of income. If you’re returning to work between the ages of 62 and 67, you will have to fill out a retirement earning’s test to calculate the money you will now be eligible to receive.
During this time, the only direction your earnings from the federal government can go is down or sideways. If you earn less than a certain amount per year (around $20,000), your benefits may stay stable.
After you finish working again, your social security will typically rise even higher than before you took on a second job after your first retirement. The full retirement age in the United States is around 67 (though it is subject to change), and if you postpone retiring after that age, you get more monthly benefits.
If you do plan on going back to work, you will see a drop in social security if you’re between 62 and 67, but an increase in social security once you retire again if you work past the full retirement age.
Tips for Working After Retirement
When taking on a part-time or new job after you retire, there are a couple of things to keep in mind.
- Create a budget for taxed income. Even if you’re earning social security benefits, any form of reliable income, from investments or a job, can be taxed. Make sure to balance your budget based on after-taxes income rather than gross earnings. Keep in mind that a part-time job will pay less than a full-time one and that you may have to adjust your spending.
- Tell your employer you are a retiree. By notifying your employer, they won’t report you as an “active member” and potentially risk some of your social security benefits. Additionally, they may assign you to less time or skill-intensive tasks.
- Find something you enjoy. Whether it’s working at the same company but for less time, or going down a completely new career path, finding work you enjoy after retiring is important to stay motivated, especially since you may be sacrificing some of your golden years to do so.
- Prioritize healthcare. Getting older means that you want to make sure you have good healthcare coverage. If you’re looking only at pay when finding a new job, consider factoring healthcare coverage into the mix. With your insurance going up as you age, health care benefits become very valuable.
- Be careful with pension planning. If you move to a part-time job in a company where you were originally working full-time, it may affect your pension after you retire. Since pension is often based on the salary you were making in the last years before retirement, a part-time job can lower that plan. Talk to your employers before making the switch!
The Benefits of Working After Retirement
Even though you need to take a careful look at budgeting, taxes, and pension plans if you decide to work after retirement, there are plenty of benefits in doing so- both financially and in terms of life quality. Here are a few:
- Social life. Some may find that after retiring, they miss the camaraderie of their coworkers. Working again, even if it’s only part-time, can reopen your social scene again and help you meet new people.
- More income. If you hit the balance between working enough to outpay your would-be social security benefits, you’ll have more cash to pay for vacations, a retirement fund, or everyday expenses. Additionally, if you work after retirement age, you get both social security and your new income.
- A more relaxed work-life balance. If you’re used to working full-time, working after retiring or retirement age is a great time to shift to fewer hours per week. This way, you’ll have more time to pursue hobbies but still have a job that will motivate you to get out of bed.
- Opportunities to branch out. If you’ve been working at the same job or in the same field for decades, taking on a new job after retirement is a great way to explore some of your other passions.
Recommended Jobs for After Retirement
There’s plenty of rewarding part-time jobs for retirees, and a few are mentioned by the American Association of Retired Persons. Here are a couple:
- School bus driver: If you want to be around kids, but not all day, a school bus driver is a great option. All you need is a clean driving record, a commercial driver’s license, and tolerance for a little chaos.
- Bookkeeper: If finance is your passion, keeping track of someone’s financial records and invoices may appeal to you. This position can either be full-time or part-time, meaning that you may be working for a larger company rather than a single person.
- Secretary: If you’ve got typing and organizational skills, this may be the job for you. Working in an office is great for those who would rather sit for long periods of time rather than stand, and enjoy working collaboratively.
- Nanny: If you’re missing the grandkids (or don’t have any), nannying or babysitting, might fit into your schedule well. This job can be an especially rewarding experience for those who enjoy younger children.
- Home health aid: Another extremely gratifying job stems from taking care of someone in their home. Without the hustle and bustle of a hospital, you can bond with your patients in a comfortable environment.
- Cashier: While this job demands the most time on your feet, a part-time gig can provide a schedule to your day and put a little extra money in your pocket.
Working after retirement has many benefits. Since the retirement age is 67 in the United States, you will receive both social security benefits and a paycheck if you’re working past that age. Also, your benefits will increase for each additional year you work.
Additionally, working can provide much-needed scheduling and social interaction to a retiree’s life. That’s something you may find you are missing after suddenly having a lot of time on your hands.
Lastly, working provides an obvious benefit- more cash! If you’re planning on travel or other expensive hobbies, having extra income certainly won’t hurt.
If you do plan to work part-time at the same company, make sure to talk to your previous employer about pension planning, as it may go down as a result. Also, make sure to plan for your income to be taxed if you’re under the retirement age, or receiving social security benefits.
Happy job hunting!