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What if I Don't Want to Stop Working in Retirement?

What if I Don't Want to Stop Working in Retirement?

April 02, 2024

Most workers are counting down the days to retirement, but some are not as eager to walk away from their careers. Maybe you are especially passionate about your job or you love seeing your coworkers every day—whatever the reason, it’s not unusual to want to keep working in retirement. Nearly one in five retirees choose to work during their golden years!


Deciding whether or not to keep working can be difficult, and there are several financial implications to take into consideration. When one of our clients is contemplating working in retirement, we like to walk them through a series of questions to help determine if it’s the right choice for them.


  1. Do you have a plan for how you’ll spend your time in retirement?

The average employee spends over 2,000 hours every year at work. When you stop working, that leaves you with a lot of extra time to fill! We encourage our clients to have a plan for how they’ll spend their time in retirement—whether that’s volunteering at a nonprofit, pursuing a new hobby or joining a club. But if you’re not sure what’s next for you, that may be a sign to continue working part time in retirement. Working reduced hours will allow you to enjoy some free time without losing your sense of purpose and routine.


  1. Do you have a community outside of work?

Work provides a sense of community and a regular place for social interaction. Once you retire, a sense of loneliness can creep in. Being lonely or isolated can affect your mental and physical well-being, potentially leading to problems like heart disease, depression and cognitive decline. It’s important to connect with others in retirement, so carefully consider where you can fill your social bucket, perhaps at a fitness club, community group or church. It doesn’t matter where you go, so long as you have a community to connect with. If you’re not quite ready to walk away from your work friends, you may want to continue working in retirement.


  1. Do you need the extra money to afford retirement?

The majority of adults say they are behind on saving for retirement, but continuing to work in retirement can give you a cushion if your savings are not where you need them to be. Even if your nest egg is large enough to cover your basic needs, a part-time job could help you afford extra purchases like travel, hobbies or entertainment.


  1. Does your spouse agree that continuing to work is a good decision?

If you’re in a relationship, you and your partner should be on the same page when it comes to your retirement lifestyle. It can be challenging if one spouse has been dreaming of traveling and relaxing in retirement, but the other wants to keep working. When we help our clients create a retirement roadmap, we ensure both partners’ wishes are incorporated. Before you say “yes” to a working retirement, have an honest conversation with your partner about how your retirement might be affected and the steps you can take to ensure you both enjoy your golden years to the fullest.


Financial Considerations for a Working Retirement

While there are many benefits to working in retirement—extra income, continued social interaction and increased mental and physical activity—there are several financial considerations to keep in mind, as well.


If you are old enough to start taking Social Security benefits, make sure you understand the earning limits to avoid reduced benefits. If you are under your full retirement age, your Social Security benefits will be reduced by $1 for every $2 you earn above the annual limit, which is $22,320 for 2024. If you are turning your full retirement age in 2024, your benefits will be reduced by $1 for every $3 you earn above $59,520. Once you reach full retirement age, there are no earning limits, but earning extra income can increase your Social Security taxes.


Earning more money can affect your overall tax liability, as well. If you are collecting a paycheck on top of your required minimum distributions and Social Security benefits, you could be bumped into a higher tax bracket. It’s important to run the numbers with a financial professional who can help determine if any extra income will cause more harm than good.


If you are considering working in retirement, meet with a financial advisor who can help you carefully weigh the pros and cons. Everyone’s retirement goals are different, so your plan should be as unique as you are. If you want to learn more about how we can help you plan for your dream retirement, reach out to schedule a meeting with us. We start planning with your goals at the forefront, so whether you want to keep working in retirement or spend your golden years on the beach, we can help you turn those dreams into reality.