Working Past Your Retirement Age: What To Know

Many people reach the age of retirement happy to leave the workplace and fulfilled with their accomplishments. However, not everyone feels this way. Some individuals may choose to stay in the workforce for various practical and beneficial reasons. In fact, a survey by the American Advisors Group in 2021 confirmed that more than a third of older adults in America wish to work past retirement. 

Pros

Financial stability

Primarily, working provides you with an additional source of income. Even though you will receive pension payments, some may feel more secure about having an extra source of income. Additionally, you can still collect certain retirement benefits. Thus, working past retirement may be quite lucrative, bringing you peace of mind and a sustenance lifestyle. 

Health insurance 

Working under an employer provides you with great private insurance plans. While Medicare is a good healthcare option for older adults, private insurance covers more ground in terms of medical needs. Additionally, employer benefits tend to be cheaper than Medicare supplements. 

Passion for Career

In life, most of us hope to pursue a career that we love. For some, leaving the field that they are passionate about is not the right choice. Whether that be teaching at a university or running a restaurant, you may wish to continue working. After all, dedicating your time to a job that you are interested in is rewarding, meaningful and useful.

Health 

Working beyond retirement has multiple mental and physical health benefits. Research shows that working stimulates cognitive engagement, improves mental health, and increases activity. Therefore, staying in the workforce can be beneficial to the mental and physical changes that occur with ageing. 

 

Cons

Social security

Knowing your legal rights when it comes to retirement is important, especially in relation to the social security program. Social security collects taxes which are then used to provide benefits for retired people, individuals with disabilities, and those who lost their spouses. If you retire, continue working, and make an income, your social security benefits will be different. For example, older retirees (above 66 and eight months old) who work lose social security benefits if their earnings are above $48,600 in a year. These differences can get hard to keep track of, so it is essential to know how your employment might affect your social security benefits. 

 Taxes

Working past retirement can also affect how much you pay in taxes. Earning a certain amount may increase the amount you owe in taxes. Likewise, individuals may be taxed on their social security benefits. 

 Health 

While staying active and working has mental and physical health benefits, there are also some effects to be cautious of. It can be hard to accept ageing and decreasing capacity for some older people. This can lead to unwise working habits. Thus, you should avoid giving yourself more than you can handle in the workspace. 

 

Working past retirement is a great choice for some people. When considering your unique scenario, it is important to make the right decision for you by weighing out the pros and cons.

— Eugenia Shakhnovskaya