Essential Facts About Pursuing a Career During Retirement
Working Past Retirement Age: Pros, Cons, and Considerations
Working beyond the traditional retirement age can offer numerous benefits, but it also comes with important factors to consider. According to Lena Haas, head of wealth management advice at financial services company Edward Jones, many view retirement as a new chapter in life, an opportunity to pursue what they love [1].
Savings and Contributions
One of the key advantages of working longer is the ability to continue contributing to retirement accounts like 401(k)s and IRAs. This can help accumulate more savings and potentially make up for earlier shortfalls [1].
Social Security
Delaying Social Security benefits beyond full retirement age increases the monthly benefit amount, providing greater lifetime income [1]. However, it's essential to weigh this against delayed access to funds and consider health and work ability.
Required Minimum Distributions (RMDs)
Once you turn 73, you must take RMDs from traditional IRAs and previous employer retirement plans regardless of working status. Yet, if still employed, you can delay RMDs from your current employer’s plan until you retire, which can help manage taxable income [2].
Government Healthcare and Medigap
Medicare coverage begins at age 65 but does not cover all medical expenses. Many retirees purchase Medigap (Medicare Supplement Insurance) or Medicare Advantage plans to fill these gaps. Working beyond retirement age might affect timing of Medicare enrollment and supplementary coverage decisions [4].
Age Discrimination and Job Market
Although older workers bring experience and face a relatively strong labor market, age discrimination remains a significant hurdle in job searching and employment [2].
Work-Life Balance
Continuing to work longer can delay non-work activities such as travel or spending more time with family. It demands balancing health, job satisfaction, and personal goals, as staying physically and mentally capable is essential [1].
Other Factors
It's common for people to live to their 90s and beyond, creating a real risk of outliving savings. Studies have shown that working at a later age can help mitigate health problems such as dementia, heart disease, and cancer [3].
Leaving a Medigap plan for workplace coverage is risky because if you only have Medicare, you are responsible for substantial deductibles and copayments. The Pew Research Center estimates that 19% of adults aged 65 or older continue to work, nearly double the percentage in 1987 [5].
Work income can temporarily reduce Social Security checks if earned before reaching the full retirement age. The reduction isn't lost money, but it can throw budgets off because retirees were counting on the entire check plus work earnings [2].
On average, a 65-year-old man has a life expectancy of 82, while a 65-year-old woman has a life expectancy of 85 [6]. Careful planning with a financial advisor is recommended to optimize outcomes.
- For those considering working past retirement age, it's worth exploring the defi of delaying Social Security benefits - this strategy can increase monthly benefit amounts, thereby enhancing health-and-wellness through improved personal-finance.
- In the realm of workplace-wellness, it's crucial to note that continuing to work can help bridge the gap in savings and contributions for retirement accounts, such as 401(k)s and IRAs.
- Transitioning from a Medigap plan to workplace coverage can pose a risk, as retirees would be responsible for substantial deductibles and copayments if they only have Medicare.
- When it comes to careers and business, working past retirement age might have positive effects on health, as studies have shown it can help reduce the risk of health problems such as dementia, heart disease, and cancer.
