Can You Work After Retirement?
Can you work after retirement and still collect social security? Yes, you can. But doing this can impact your benefits—especially if you’re trying to work full-time. Here is a breakdown of how you can make working in retirement work for you so you can prepare the best retirement plan for you and your family.
Before we get into working during retirement, let’s talk about retirement age for a moment. If you were born 1943-1954, your full retirement age is 66. From 1955-1957, that number goes up consecutively by two months. So your full retirement age if you were born in 1956 is 66 and four months, or if you were born in 59 it would be 66 and 10 months. If you were born anytime after 1960, your full retirement age is 67.
You can choose to retire before this, and you start receiving social security benefits as early as the age of 62. But if you do this, your benefits will be permanently reduced. On the other hand, if you do not retire and begin taking social security, your benefits will be incrementally increased up to the age of 70—at which point they max out.
If you are over the age of 62 and your monthly earnings are less than $1,580, the Social Security Administration (SSA) will consider you retired.
Once you start receiving social security benefits, are you still able to work? Working part-time after retirement might seem essential for some people, or even full-time if you’ve found an exciting new job offer. You are permitted to do so, but this might temporarily affect your benefits if you haven’t reached full retirement age.
If you’re already receiving social security benefits but haven’t hit your full retirement age, the max amount you’re allowed to make before facing a benefit reduction in 2021 is $18,960, or $1,580 a month. For every $2 you earn over $18,960—$1 will be withheld from your Social Security benefits.
If you made $23,920 in 2021, your earnings over the limit ($18,960) would be $4,960. Half of this amount ($2 for every $1) would then be withheld, or in this case—$2,480. That means there could be a few months where you do not receive your Social Security check and the rest of the months, your monthly check amount would be the same.
If your spouse also receives money from your benefits, those benefits would be reduced. Your spouse’s personal benefits, however, wouldn’t be impacted.
Side note: If your benefits are withheld because of your earnings, your monthly benefit will increase starting at your full retirement age to take into account those months in which benefits were withheld.
Whether you are working part-time after retirement or full-time, your benefits won’t be reduced once you’ve reached full retirement age. However, while this amount won’t be reduced—it could increase. If you begin collecting social security benefits before, but then decide you want to work after retirement—you can choose to pause your benefits, which could increase the amount in benefits you receive up to the age of 70.
Side Note: There are a couple of other ways in which your benefits might be increased. Benefits are automatically recalculated for the increase in the cost of living each year. Your benefits might also be increased if you make more during the last years of your career.
Looking for part-time jobs for retired people? As the workforce becomes more remote, there are more and more part-time jobs for retired people than ever before. You could work at call centers, in service departments, or maintain a job in the same field that you’ve been working in.
But for some people who choose to work after retirement, the social aspect of work is more important than the money. If that’s the case, you might consider something like being a door greeter or working for a business that you’ve always admired. Things like Uber Eats and Taskrabbit might also be a good idea, and they’ll allow you to create your own schedule.
Understanding the cost of senior living and how much you need to retire can take some careful calculations. But there are many ways to retire happily in your golden years. You just have to be ready to plan ahead.
Contributed to The 55+ Society
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